What if salespeople were to assume the responsibilities of the F&I department? That’s a question my dealer clients have posed quite often of late. As a dealership trainer and consultant, it’s my job to provide my clients with unbiased and in-depth reviews on the effectiveness of any new idea or process. Still, you can imagine my interest in being tasked to find out exactly what dealership life would be like without an F&I department.

Every idea is worth testing, but an unbiased measurement of the results is needed to determine whether the idea or method will accomplish the desired results. The reason my clients are interested in knowing what life would be like without an F&I department is because of today’s culture-based changes in society. Some ideas seem to fit the logic of this new culture, but, when put into practice, they fail to produce the expected and desired results.

Eliminating the F&I department is one such idea. We have studied this idea carefully and thoroughly. Here are our findings:

The Problem: Customers have expressed a dislike for dealing with more than one person during the buying process. The logical solution to this problem is to have one person handle the entire buying process, with that responsibility being left to sales personnel. This move would mean salespeople would handle everything from vehicle demonstration, setting trade values and deal negotiations to presenting all aftermarket and F&I products and completing the financing and associated paperwork.

Possible Benefits: Moving to a one-person process could improve customer satisfaction, provide process efficiencies and possibly more income.

Methodology: The company’s Package Option™ approach seemed like the perfect fit for integrating the F&I process into a salesperson’s normal duties, allowing him or her to easily present F&I products. We agreed to adapt our method to fit the one-person process, train a select group of salespeople in its proper use and then measure the results.


To conduct a fair and accurate study we had to first choose top performing salespeople. We then had to provide extensive training for these salespeople in the areas of F&I product knowledge, interest rates, full disclosure, legal issues and proper presentations. We then measured their results against the results of an effective F&I department operating in the same environment.

We measured the results using the following criteria: income per retail unit delivered; acceptance rates of products; balance of income from different products; customer satisfaction with the process; charge-back percentage; administrative effectiveness (returned contracts, paperwork, etc.); and disclosure.

The Results

1. Income: As we began to measure preliminary results, we were impressed with the income that properly trained salespeople were able to produce using the menu option method. We found income levels that would fall in the acceptable range for many dealers ($300-$500 per retail unit delivered). This income was around 60 percent of what the full-time F&I managers were able to produce in the identical environment. However, this level of income tended to drop off dramatically after a matter of weeks. Retraining and follow up had some positive effect on this lowering of performance, but a consistent income level was never maintained. Interestingly, changes in pay plan seemed to have little or no effect. One dealership’s salesperson production went from $480 per unit to $187 per unit in 12 weeks. The F&I departments, however, showed an increase in income over the same period.

2. Acceptance Rate: The same type of change occurred in the area of acceptance rates. Initially, salesperson acceptance rate levels, while tilted toward service contract sales, were in a reasonably acceptable range. However, this quickly changed. Penetration levels tended to drop off quickly and penetration levels of credit life and disability virtually disappeared. Training tended to have a temporary positive effect, and changes in pay plans had little or no impact.


3. Balance of Income: Initially, the balance of income tended to lean toward service contracts. This quickly changed, as penetrations dropped and shifted quickly to a dangerously high percentage of finance reserve income. This ultimately led to a problem with charge-backs.

4. Customer Satisfaction: This was surprising in many ways, as customer satisfaction with the sales process was almost identical with or without an F&I department. We discovered that when customers express a dislike for dealing with more than one person, they may be referring to the back-and-forth process between the salesperson and sales manager, and not the time spent in F&I.

5. Charge-Back Percentage: Salespeople had a lower overall percentage of charge-backs due to the sale of fewer products. However, as a percentage of product sold, cancellations of products sold by salespeople were nearly double what they were with the F&I department. The biggest reason for these cancellations seemed to be related to disclosure.

6. Administrative Effectiveness: This was the area that caused the most frustration for dealers. Immediate and serious problems developed when the salespeople did the final paperwork. The amount of detail required to properly complete the paperwork seemed to overwhelm the sales staff and created problems with lenders, office staff and management. More than one dealer resorted to hiring an employee to complete the paperwork for the salespeople. Aside from adding another salary for the dealer, this new position operated much like an F&I department, minus the income.

7. Disclosure: This was a serious problem. Even well-trained, honest salespeople seemed to have a problem accomplishing proper disclosure. This is unacceptable in today’s regulatory environment. The biggest issue seemed to be related to time. After spending the time it takes to sell the car, customers wanted to complete their paperwork quickly. Trying to accommodate the customer’s wishes, most salespeople attempted to move through the final documents as quickly as possible. This prevented most salespeople from providing the customer with proper disclosure.

Conclusion: The F&I department has a difficult and important function in today’s dealership, one that cannot be replaced by the sales staff. While some success can be achieved by salespeople, the disadvantages far outweigh the advantages. Those dealers who have tried both methods find that they need the income, protection and customer care that only an F&I professional can provide. However, it’s key that we understand the culture of today’s consumer, but we also need to study and examine new ideas carefully to achieve the results we desire. We also need to concentrate on hiring the best F&I managers, and provide them with the processes needed to accomplish the results we want.

George Angus works with Team One Research and Training, a research and training company that specializes in scientific, research-based program development and training for the automobile industry. Those interested in speaking with him can call (800) 928-1923.