The Industry's Leading Source For F&I, Sales And Technology

Insider Tip of the Week

Invest in an F&I Timeshare

Agency head explains how one dealer client maximized profits and avoided personnel issues by setting up a ‘timeshare’ system for his F&I managers.

August 2013, F&I and Showroom - Feature

by John Novak

Dealers are always looking to rightsize their operations, particularly when it comes to their F&I department. But matching the number of producers to the amount of vehicles your operation rolls every month may not always be the answer.

Take Latrobe Chevrolet and Latrobe Ford in Latrobe, Pa. The owner there, Lud Druchniak, discovered the key to maximizing profit and management stability in his F&I department was to keep two full-time business managers on staff — and that’s despite his operation’s monthly output not calling for a second producer.

The solution was a “timeshare” between two long-term employees. Sandy Reddinger and Wendy Hirak have worked at Latrobe for 22 years and 14 years, respectively. They follow a flexible schedule that allows both of them to be at the dealership during peak business hours. They schedule the rest of their time — and their time off — in a way that ensures one of them is always available. And they stay effective by never working too many hours.

My firm worked with the managers and staff to refine the concept, and it was a total success. Latrobe’s finance department produces one of the highest PRU averages of all our dealer clients. Timesharing has also provided stability in the department, ensuring that both managers will stay with the dealership for many more years to come.

Reddinger and Hirak say their flexible hours have made them more successful. Vacations, illness and maternity leave are no longer an issue for them or the dealership. They attend regular training sessions together to ensure their methods are identical. That’s critical because many customers will end up working with both managers. Their process and selling methods are very simple, and they only present the basic group of products to customers.

We have tried the same method with other dealer clients, but none have had the same success as Latrobe with the approach. One reason could be that Druchniak insists that sales managers and their staff give 100 percent commitment to the F&I department, including the timeshare concept.

The sales managers are involved with every deal from the start, but they leave the actual customer interview to Reddinger and Hirak. The salespeople know enough about the products to lend their endorsements, and they gain knowledge about the customer’s driving habits to help prepare the business manager for the interview. The F&I department is responsible for all deliveries, including all of the state forms. With their combined years of experience and training, compliance issues are a minimal threat.

If you think a similar approach might work for your operation, I encourage you to try it. Your personnel costs may be a little higher, but when you consider the benefits of increased F&I profit per vehicle and employee stability, you may discover that it’s actually a very easy decision.   

John Novak is the founder and CEO of First American Insurance Services Inc. in Indiana, Pa. Contact him at john.novak@bobit.com.

Comment

  1. 1. David Chapman [ August 23, 2013 @ 03:46PM ]

    Todd Cherry and David Chapman also have this type of hybrid schedule at Tri-Star Mercedes-Benz. Todd works Mon-Wed and David works Thus-Sat. These F and I professionals run over $1800 per copy and have 100% coverage with no vacation or sick days. This process has worked well at the dealership for more than three years.

 

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email: