In today’s world where consumers can find anything they want with the click of a mouse, Generation X (born 1965-1976) and Y (born 1977-1998) customers hate waiting. They’re impatient. They want things now, not later. They hate sales pitches, sales pressure and someone who won’t (or can’t) answer their questions. Generation X and Y consumers also hate someone who wastes their time. They’re media savvy, they’re skeptical and they don’t trust salespeople. The old “throw them against the wall and see what sticks” doesn’t work when they walk in with an online approval from their credit union.


Word Track and 8-Tracks

Generation X and Y want hands-on, direct product contact. What they don’t want is someone reading the coverage from a brochure, or someone regurgitating a work-track some old-school F&I trainer made them memorize. They seek out knowledge and expertise; they avoid ignorance and sales pitches like the plague. They constantly multi-task, so they expect you to do the same. They come into the F&I office listening to their iPod and talking on their cell phone. They text message their friends while driving. Why can’t you type up their paperwork and carry on a conversation at the same time?


X and Y customers also demand proof — they want examples, not statistics. They want to be engaged and stimulated, not forced to listen to a canned pitch. Word-tracks are so yesterday (been there, done that)! They immediately recognize video and computer infomercials for what they are — sales pitches! Generation X and Y consumers want to be seen as unique individuals, not another mark. F&I infomercials, menu software and tired old closes won’t sell these customers anything…F&I professionals will!


New Rules, New Risks

In today’s litigious environment, who’s got their finger on the triggering term? Payment quotes must include all terms that impact the monthly payment, including term, APR, down payment and amount financed. That also includes the payments shown on your menu. Keep in mind, every document leaves a paper trail. So, what’s in your deal jacket?


When it comes to the Equal Credit Opportunity Act, Gramm-Leach-Bliley and OFAC, you can’t win, but you can lose. What you say can cost you! And your 4-square might get you three squares and a cot, especially if it’s designed to mislead or misinform a customer. They key is compliance. That means no packed payments, no best rate promises, no illegal ties and a menu in every deal.


Adding Value, Not Aggravation

Customers are entitled to accurate, non-misleading monthly payment quotes. You need to make certain you provide them because tonight the entire sales and F&I transaction might just be on YouTube. Don’t believe it? Try typing in “buying a car” on


F&I products are also now available everywhere! Customers can buy a service agreement from their credit union and Sam’s Club, GAP from their State Farm agent, and arrange for a loan online.


The F&I process must add value to the customer’s purchase experience. That means giving customers options, not product presentations. We don’t want to satisfy customers, we want to delight them!


Money Follows Service Wherever It Goes

It’s critical that you implement a customer-focused F&I process. Don’t keep customers waiting! Bring them back to the F&I office immediately, and let them see what you’re doing. As I’ve said before, there shouldn’t be any secret spy stuff going on in there anyway. F&I should enhance the purchase experience, not simply prolong it.


F&I must expedite the delivery process. That means managers must be able to multi-task, too! We must also collapse confrontation when a customer gives an objection. For example, a good reply to a customer’s objection would be, “No problem, these are just options.” We have to sell based on the customer’s agenda, not our agenda. Stop selling products and start adding value. Utilize needs-based selling, not greed-based selling. That means educate and inform customers about their options. Stop selling and start helping!


Out With the Old, In With the New

It’s also important that you continuously evaluate new F&I products. It may be time to drop a product, or add one or two to your lineup. If you regularly have less than 10 percent penetration with a particular product, it may be time to re-evaluate whether or not it’s the right product for your market.


In addition to vehicle service agreements, GAP and credit insurance, there are a lot of F&I products available today that are definitely worth considering, including:


•Windshield Chip Repair


•Environmental Protection


•Warranty Compliance (Required Maintenance) Program


•Tire & Wheel Road Hazard


•Excess Wear & Tear


•Paintless Dent Repair


•Theft Deterrent Products


•Vehicle Recovery Products


•Identity Theft Protection


•Emergency Notification Program


•Rental Car/Roadside Assistance Programs


•Vehicle Accessories



What Did They Know, And When Did They Know It?

In an X & Y world, improving F&I department performance also requires you implement a comprehensive, consistent and compliant F&I training program. While your people may change, your process doesn’t. That means creating an ongoing in-dealership training program that’s fueled by a monthly training calendar. Professionals practice and you need a practice schedule.


You also need to monitor performance on a daily basis. Whenever you monitor performance, it tends to increase. An F&I professional measures not only departmental performance, such as penetration rates, profits, charge-backs and customer satisfaction, but also personal and lender performance. Do you know what your penetration percentages are, your profit per retail unit, and how that compares to last month and last year? Do you know how many deals you sent to each lender? What is your look-to-book ratio and portfolio mix at each lender, and how does that compare to what they need?


One of the best ways to improve performance is to record and evaluate actual F&I presentations. The camera is a terrific way to evaluate your presentation. It’ll also help you determine what’s working and what’s not. Are you doing sufficient needs-discovery? Did you have a conversation with the customer or make a presentation? Did you use visual aids to help them see the need for your product? The great thing about training is you can see the impact on your financial statement each month.


Finally, every F&I manager in the dealership should be certified by the Association of Finance & Insurance Professionals. An F&I professional must be familiar with, and comply with, all the laws that impact F&I on a daily basis.


It’s critical that your financial services sales process add value, not aggravation. Today, it’s not enough to merely satisfy customers, you need to delight them! You must demonstrate that commitment with a customer-focused, needs-based F&I sales process. And customer satisfaction should be part of any compensation plan. Every F&I manager should also participate in a comprehensive ongoing training program, and be AFIP certified. In and X & Y world, and especially in the F&I office, you have to STOP wasting the customer’s time and START adding value!


Ron Reahard is president of Reahard & Associates Inc., an F&I training company. Reahard conducted the F&I workshop “F&I in and X & Y World” at the 2008 NADA Convention in San Francisco. He can be reached at (866) REAHARD, or by e-mail at [email protected].

About the author

Ron Reahard

President of Reahard & Associates

Ron Reahard is president of Reahard & Associates Inc., a Dealers’ Choice Award-winning provider of F&I classes, workshops, and in-dealership and online training. Contact him at [email protected].

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