Ask Hugh Abernethy about F&I product sales and the vice president of DealerTrack’s Aftermarket Network Solutions talks about how product providers are reporting banner years. He’ll say GAP is becoming an increasingly important product, and he believes that the service contract business will become more sophisticated over the next two years. Ask him what will drive this innovation and he responds, “Menus.”

Always viewed as both a compliance and presentation tool, the F&I menu is evolving into a great selling tool. Driving this are features such as real-time ratings for VSC products and declination sheets that provide one additional chance for a dealer to sell products.

“It started out that menus were just for compliance,” says Phil Battista, co-CEO of MenuVantage. “Now, what we’re seeing is the menu evolving into a real selling system.”

The success of menus is increasing requests from dealers for more features that can streamline the process, either through customization features or through integration of pricing for aftermarket products. This is also causing more and more providers to partner with software makers.

“More and more dealers are asking for more of these types of tools, such as real-time rating [for VSC plans],” DealerTrack’s Abernethy says.

Core Benefits Never Change

Despite the onset of newer features, the core benefits of a menu haven’t changed.

“When we weren’t using menu systems, you would just try to present something to the customer without them being able to look, see, feel and touch the product,” says Jay Mathews of Hall Ford, Newport News, Va., who has used Innovative Aftermarket Systems (IAS)’s menu for approximately a year. “So now that we have different [visual tools] sitting in the office, this really gives us the opportunity to sit down and go over them. And any questions customers may have, they look right at the product and we can address those concerns immediately.”

Matt Nowiki, director of information technology at IAS, says, “I think when the concept of menu selling was first introduced, most dealers didn’t think that customers would buy more if the products were actually presented to them. But that’s not the case. Since we’ve introduced menu selling, in every situation we see finance numbers go up as far as number of products sold, as well as profits per product.”

As for those F&I managers who prefer paper menus because they allow them to configure a variety of options, Hall Ford’s Mathews says electronic menus can do that and more.

“I’d have to say organization-wise, our menu really increased the profitability of the dealership and the company as a whole,” he says. “And it’s provided new opportunities for us to expand the company.”

Menu Grooming: Getting Creative

Most dealers talk about menu configurations that utilize a multi-tiered approach. Platinum, gold, silver and bronze package formations are typical setups used by dealers. But one insider says there are other arrangements to be considered.

Todd Johnson, sales manager for Aftermarket Network Solutions at DealerTrack, says creating a multi-tiered package based on price can sometimes work against a sale, as price-conscious consumers tend to look toward the lowest-priced package.

He suggests that rather than organizing menus based on quantity or price, the manager can categorize products by the benefits they offer to the customer. Using package titles such as “mechanical coverage” and “security” are what he recommends. Johnson says a good closing line could be, “Which package looks best to you?”


A common recommendation among trainers is for F&I managers to have vehicle parts in their office to demonstrate repair costs. But some menus, such as the Web-based version Toyota Financial rolled out at the beginning of 2006, are now introducing multimedia features that can do just that.

Fueled by dependability studies conducted by J.D. Powers and Associates, Toyota Financial’s menu visually demonstrates component repair costs not covered by the factory warranty. The F&I manager simply puts the computer mouse over highlighted components to produce a pop-out bubble displaying repair costs.

“When we were looking at different menu providers, we were looking for a menu with features that made the selling process as interactive as possible,” says Gene McNulty, national sales development manager for Toyota Financial. “A lot of dealers are asking for online tools and online menus. That’s the main reason why we created an online presentation tool.”

The foundation for Toyota’s dealer menu is the Impact Group’s Process300. It offers a video presentation of F&I products, bullet-pointed product benefits, individual explanations and more. It also allows F&I directors to see what selling tools F&I managers use to make the sale, as well as what products were sold. For John Seyfert, general manager of Lancaster Toyota Mazda, Lancaster, Pa., the approach is definitely making a difference.

“We were averaging about $400 in income per finance deal,” he says. “That shot up and has more than doubled since we began using the Process300.”

Impact Group also takes a different approach to product presentations with a one-package closing strategy. Instead of displaying multiple packages, the menu lists all products in one column. From there, customers can pick and choose which products they want. And as each product is eliminated, the menu automatically calculates changes in cost, term, APR, base payment and interest rate.

COINdata is another company that made automated menu customization a part of its docuPAD Digital F&I System. It consists of a high-definition display that lays flat on the F&I manager’s desk. It is designed to take advantage of the unoccupied space between the F&I manager and the customer, and aims to create an interactive selling environment to increase product sales while also improving accuracy, compliance and transaction times. It is also viewed as a possible link to the industry’s e-documents future.


“For those F&I managers who still like the paper-menu approach, the docuPAD can do that as well — only electronically,” says Mark Singleton, CEO of COINdata. “Basically, it displays what looks like a real piece of paper that the F&I manager can use to customize product packages and edit pricing on the fly. On the electronic forms side, the docuPAD can pick the correct forms for each deal, which the customer then signs using the system’s electronic signature validation feature.”

Customization Goes Beyond Package Creation

Aside from customized product packages, customized coverage plans are another big market trend. This is one of the reasons why e-ratings — where menu providers integrate a provider’s ratings — are another big trend. Much of that is rooted in the onset of factory extended warranties, which has forced both dealers and providers to be light on their feet.

“Having a customized program for our customers is crucial,” says Lee Mitchell, director of F&I operations at Group 1. “Whether customers plan on keeping their car for two years or six years, they need a program congruent with their driving habits.”

That’s why finding out how much and how far the customer expects to drive his or her vehicle is critical to how F&I managers shape coverage plans.

“The difficulty for the business manager is to convince customers that they’re going to be the beneficiary of this discussion more than the dealership is,” says Mark Thorpe, president and CEO of the Impact Group, who adds that it’s important for F&I managers to help the customer understand why he or she needs each product.

Putting pressure on the customer to purchase a product, he warns, is not a good selling technique, either.

Selling on Declination Sheets

One feature that removes the pressure sell while also offering a last-ditch attempt to overcome customer objections is the declination sheet. Not only is this feature a great compliance tool — listing out both the products the customer accepted and declined — it also allows the F&I manager to provide the customer with a review of all the products.

DealerTrack’s Johnson suggests using the word “forfeit” rather than “declined” when reviewing products the customer did not select. This gives the customer the impression that he or she is missing out by not selecting those products, he explains.


Zeus Concepts takes another approach, providing customers with a separate declination sheet that lists only the products the customer did not select. It takes this a step further by providing the cost per day for all products listed, showing the customer an even greater value of the products.

“A couple of products could be the price of a can of coke a day for full protection of [a vehicle’s] tires and so on,” explains Bill Schaudt, Zeus Concepts’ software designer. “It kind of sells itself.”

Selling Extended Terms and Bi-Weekly Payments

Another trend is offering consumers a chance to pay for F&I products on a bi-weekly basis. It allows customers to pay off their loans faster while lowering payments. The thinking behind this strategy is it’s much easier for customers to budget loan payments if they coincide with their monthly pay schedule.

MenuVantage pairs this concept with what it calls a “three-month bump.” Using its menu’s ability to display total cost, as well as monthly, weekly and daily costs, this strategy allows the customer to take advantage of the lower payment while paying the loan off in the original term. It also eliminates any negative impact longer-term loans may have on a dealership’s trade cycle.

Mike Balise of Balise Auto, which has locations in Massachusetts, Rhode Island and Connecticut, is one dealer who’s reaped the benefits of this concept.

“We’ve seen profits increase by about $200 across the board,” he says. “Let’s say I’m trying to sell you something and you say, ‘I don’t want it over 60 months.’ I can now respond, ‘What if I said you could pay it off in 60 months and still get the benefits of this and not have your payment go up that much.’ Switch the terms to 63 months on a bi-weekly-payment basis and the customer can pay off the loan in 59.5 months.”

Features Leading to Reduced Transaction Times

A core benefit of a menu still lies in its ability to reduce transaction times. And with features such as integrated F&I product prices, transaction times should be further reduced.

“On average, we believe we’re saving about 20 minutes of processing time in the F&I office today, and we expect that to get better,” says MenuVantage’s Battista.

The Impact Group’s Thorpe suggests that today’s menus can reduce product presentation times to about 15 to 20 minutes.

“That’s enough time for a good, solid presentation,” he says.

The next step is a complete evolution toward a paperless F&I process. On the lender side, there’s e-contracting. On the F&I product side, there are solutions that aim to automate sales. DealerTrack and IAS are two companies looking to create such a package. Advent Resources is also a company looking to automate what has been a manual process with its recently released F&I Express.

“It closes the loop to be able to sell products efficiently,” says Tim Gill, president of Advent Resources. “Business managers want to be able to show their clients different options. Once that’s done, our menu system will figure everything out to the penny. And unlike other systems that still rely on dot matrix printers to print out forms, F&I Express will be able to pre-populate the forms and print those out on just about any type of printer.”

Advent’s F&I Express is a tool designed to work with various aftermarket vendors, allowing providers to electronically receive deal information from dealerships. The electronic transfer of information makes products immediately effective so that customers can drive off the lot and be instantly covered by whatever product they purchased. It also allows F&I managers to access product information, contracts and policies with just a few mouse clicks.

Dealers not signed up to Advent’s menu solution can also access F&I Express at no charge.

“Not only does F&I Express make third-party vendors available to dealers, but it also allows provider representatives and agents to see what’s going on. It allows an agent, for instance, to manage about 50 dealerships while allowing providers to get a global view of what’s going on out there,” Gill adds. “Now, everyone in the food chain sees what’s going on. There’s no question about what the dealer owes the agent, or what coverage plans have been sold.”

Gill says he sees innovation increasing even more in the years to come.

“If you look back 10 years, we were the first guys to integrate a point-of-sale system with banks,” Gill says. “We worked our butts off to get dealers to move to an automated system. I think dealers are now starting to get it.”