You know, the more things change, the more they stay the same. As much as I wish I could claim to be the first to apply that phrase to the F&I office, I can’t. The credit must go to Julie Horns, an F&I pro I talked to for my technology story. I thought I’d lead off this month’s editorial with her observation, as I think it really speaks to this correction we’re going through right now.
Her point is this: dealerships are no longer the hot commodities they once were. The roles have reversed. They need customers more than ever, and the same goes for lenders, which are no longer begging for our business.
“It used to be that if a bank threatened to cut you off, we could say, ‘Fine, no problem,’” Horns said. “It just reminds me of how business was in the mid to early ’90s, before lending got crazy. And you know what, this is how it should have been all along.”
Speaking of how it should have been, check out Randy Hoffman’s story on page 20. For all you longtime veterans out there, his article will be a trip down memory lane. For greener F&I managers, you’ll get an understanding of what’s changed.
Bottom line, the industry needs the skills and knowledge of F&I managers more than ever. Yes, all of the uncertainties these days have placed the focus on moving the metal, but who better to identify what lenders will accept than those on the frontlines of this credit crisis?
That’s something Dan O’Connor, a general sales manager at a Mercedes-Benz store in Tucson, Ariz., is preaching at his dealership these days. Basically, in refining his used-vehicle department, he identified a crucial role his F&I team could play. Not only could it help the desk and sales department get deals properly structured, but it could also identify vehicles offering a better spread to cover negative equity.
The key, he said, was opening up the lines of communication. “The key is good communication between the desk and F&I department, and making sure we start to construct deals early on in the process,” he pointed out. “Basically, we needed an end in mind before we started the game.
“Hopefully, this will get us away from the sales department handing off something that looks like a Rubik’s Cube.”
To help open those communication lines, we’re doing something a little different this month. Basically, we’re stepping outside of the F&I boundaries a bit by incorporating articles covering inventory management, lead generation, sales and more.
It’s all hands on deck and everyone has to grab a pail and keep this ship afloat. While our intent is to inform, my hope is that you can identify where you can influence success in those areas.
Look, it’s no longer about keeping within department boundaries; it’s all about the THE DEAL.
“We’re seeing some real world-view changes taking place,” Tom Schwartz, a spokesperson for Reynolds and Reynolds, told me during an interview for my technology story. “In some dealerships, you had some pretty thick walls between the used-car department and F&I. That’s changing pretty quickly.”
As one exhibitor prophetically pointed out at the National Automobile Dealers Association’s 2009 show, “This year is going to be the year of the used car and it ain’t going to be a good year.”
And that’s why you need to know what’s going on in your used-car department and business development center. Because no matter how good those processes are, those deals your salespeople strike won’t go anywhere without you. And those lenders leary of doing business with any dealer these days are going to need someone to reassure them that the dealership’s processes take their risks into consideration.
Bottom line, there is only so much money to lend out these days. Creditors are storing away money to make up for soon-to-be foreclosures, bankruptcies and account defaults. And as I’ve preached of late, these lenders are our new customers, and someone needs to communicate their needs to the sales department. And who better to do that than you?
As the headline to this editorial reads, it’s all about THE DEAL. The key now is to break down those departmental walls, because as I said in last month’s editorial, the lines are blurring.