Keep ’Em Separated

Like you, I’m anxious to see how things play out with this One Sonic-One Experience initiative Sonic Automotive rolled out more than a year ago. No, I’m not a fan of the hybrid sales and F&I process. As I’ve written before, I think we need to leave the hybrids to the manufacturers.

Personally, I am a little insulted that any dealer would believe that the complexities of the F&I office could be entrusted to anyone other than a competent and specially-trained individual with the proper understanding of the rules and regulations — as well as the legal jargon contained in lender/dealer agreements — that govern the profession.

It’s as if the automotive retail world has forgotten how critical F&I profits were during the Great Recession and continue to be in today’s margin-compressed environment. I guess I don’t understand why operations like Sonic would put so much effort and money into an old concept that has never delivered better results than the traditional F&I process.

Apparently, Sonic believes that by arming salespeople with iPads, they will have enough fairy dust left from their rapport-building efforts in the showroom to make something magical happen when it comes to selling F&I products. And if Sonic’s Charlotte, N.C., Toyota store really did see its per-copy average rise from $640 to $900, as reported in Canadian Auto World by an F&I trainer who mystery-shopped the store, I think Sonic needs to order some extra fairy dust.

I’m all for progress and evolution, but I just wonder if Sonic ever considered the regulatory environment we find ourselves in. I mean, how will Sonic’s Experience Guides handle straw purchases? Will they know what to do when faced with an identity thief? How about a customer whose name appears on some government watch list? What about that pesky Regulation Z?

But who cares about all that legal stuff, anyway? Especially when today’s customer wants to just buy a car and leave. And besides, we all know customers completely trust everything a salesperson says.

I’m sure Sonic has gone to great lengths to train its guides in the various nuances of F&I, as well as the laws and regulations that govern it. But can they really wear both sales and F&I hats? Salespeople sell the sizzle, not the steak. Their world is one of sensationalism and rapport building, which is great. But that’s not F&I.

As one of my colleagues suggested, maybe a better remedy is to hire top-notch F&I managers and do away with sales managers. That change would be less dramatic and less risky. Heck, it might even help solve showroom turnover, as removing sales managers would create better opportunities for salespeople. In fact, doing away with those sales manager salaries would allow dealers to pay their salespeople better. Here’s how it would work:

After eliminating the sales manager position, dealers would create small sales teams that would work exclusively with a designated F&I manager. That individual would handle all training, oversee work assignments and follow-ups, and be responsible for CSI. Each team would share the fruits of its labor on every gross dollar. Yup, that shortage of good salespeople would no longer be an issue.

And maybe some of those sales managers could be moved into recruiting positions or  become inventory managers or used-car buyers. Hey, maybe some of them would even like to be part of the team.

Just imagine a world with 100% F&I turnovers, one in which we could control deals from start to finish. CSI would improve, as customer wait times would no longer be an issue. And this new structure would foster a more positive environment with less carping about working conditions.

For you sales managers who just got your feathers ruffled, let me ask you: Is this idea any less realistic than this hybrid manager nonsense?

Folks, stop trying to reinvent the wheel. If you really think your sales and F&I process needs a change, take a step back to understand the true issues involved. Then devise a workable plan that benefits all players and relies on rigid accountability standards.

By the way, it’s time to holster those iPads. They’re not six-shooters and this ain’t the Wild West. Good luck and keep closing!

Marv Eleazer is the F&I director at Langdale Ford in Valdosta, Ga. Email him at [email protected].