I would imagine that, after 25 years in any industry, one would see many changes in several areas. Those of us who have spent the past quarter-century in automotive retail have seen more than most. New technology, new laws designed to protect people and the environment, and newly available information have led to countless changes, many of which benefit car buyers as well as dealers.
In the F&I office, however, there are some things that will never change. Knowledge, experience, professionalism, and pure talent are the foundation on which we stand. But these attributes are a hard find in too many of today’s finance managers. Most of them should really be called finance clerks.
If what you just read ruffles your feathers, then ask yourself why. And if it didn’t ruffle your feathers, you already know it’s true. So where did all the real F&I managers go, and if you’re really just an F&I clerk, what are you going to do about it?
From the Point to the Box
Once upon a time, you started by selling cars. By mastering the intimate craft of selling to another human being, you grew to understand the importance of great customer service. You were polished in your meet-and-greet. You asked the right questions and actually started listening to the answers. You learned how to identify needs, hot points, and challenges. You became less uncomfortable with objections and started using them to build value in your products.
So you sold cars for at least a few years (11, in my case) and dealt with all manner of customers — the good, the bad, and the ugly. You filled your toolbox with solid openings and closes, learning from your mistakes and polishing up what works. You learned how to pay close attention to the small details that are just as important as the big ones, and you began to deploy your selling skills strategically. You practiced, learned, practiced, learned, and practiced and learned some more.
But it wasn’t enough. You’re a deep thinker. So you start to pay attention to every aspect of the deal. You want to know the numbers and how they’re calculated — terms, rates, loan-to-value, negative equity. You’ve picked up on the differences between finance sources. You know a credit profile is more than just a score.
As all the working parts of the deal start to make sense, your creativity and critical thinking skills are enhanced. You see the big picture. You’re not just a salesperson; you’re a sales professional. You are now legitimately qualified to move into the finance department.
Once upon a time, this is how it was. And the talent level of the F&I managers who paid those dues is amazing. But it’s falling, fast, and it’s costing the industry.
Is There Someone Else Who Can Help Me?
The 2010s have been a blur of recordbreaking sales and near-zero unemployment. GMs and GSMs are moving people from sales to F&I too quickly. Sometimes it’s because they need a body behind the desk, so they pick someone who happens to be computer-literate and can fill in the boxes on Dealertrack or RouteOne. Often it’s because a young salesperson discovers the real money is in finance and threatens to quit if they aren’t promoted.
This basically means a person can have two hot minutes of experience and achieve one of the most important positions in the dealership — and the industry — without ever mastering their craft. They don’t have the knowledge, experience, or professionalism that comes from paying your dues, and they’re not nearly as talented as their old-school counterparts.
Far too many dealers are not aware of the fact that they have accepted a much lower standard for those who handle transactions worth tens or hundreds of thousands of dollars. Car buyers reach their final stop and meet their “signed, sealed, delivered, it’s yours” person, only to discover they seem to have little to no qualifications, with more arrogance than expertise. That’s what happens when you give someone something they have not worked for and don’t deserve.
All this means we are leaving millions — and I mean millions — of dollars on the table. So what can be done, what should be done, and how?
Report to Your Position Coach
A most amazing GM, Irene McGlone, once said, “If you come into my office with a problem, complaint, or issue, be sure to bring the answer, the solution, or a way to get it done with you.” In that spirit, let’s discuss two fixes for this costly flaw: specialization and advanced training.
• Specialization: If you were the head coach of a football team, would you teach every player how to play every position? Of course not. You would divide them into groups of players who specialize in throwing, catching, running, blocking, tackling, and kicking, and those groups would report to assistant coaches who specialize in one aspect of the game.
Versatility is an admirable quality, on the football field and in the dealership. But too many players in the dealership are all over the place. They play several positions, mastering none. The lines between sales and F&I are blurring.
If you are a sales manager, you should be managing and training your team of salespeople, having meetings, holding individuals accountable, showing them how to set and reach goals, and keeping your sales team polished, excited, and full of winners.
If you are a salesperson, you should be learning how to master the art of sales, prospecting, following up, giving great customer service, staying up-to-date on your product knowledge, tracking your inventory, and getting strong numbers and referrals as a result.
If you are a finance manager, you should be able to do things no clerk ever could. You should have great relationships with your finance sources and the ability to rehash deals. You should know how to strategically structure deals to maximize the profit. Your paperwork should be clean and your contracts in transit should be few.
In other words, there is more than enough for everyone to do. Stay busy by learning how to master the position you play.
• Advanced training: In keeping with the football analogy, there is no substitute for training, film study, and team meetings. Super Bowls are won and lost on the practice field.
Whether you employ finance clerks or are a finance clerk yourself, the fastest way to get on track is training. This may require significant time away from your desk and out of the dealership. Please know that you cannot learn, practice, and be tested on all the processes and skills you need to be an F&I manager in one day. Start with a full week, offsite, if possible, with a competent trainer.
Then keep it going. Training is a process, not an event. Top producers never assume they know it all. Always be willing to learn more.
This process of specialization and training can be intense for F&I clerks. For F&I managers, it’s business as usual — and a profitable business at that.
Marva Laws is a 25-year veteran of the auto retail and finance industries who currently serves as business manager at Volvo Cars Annapolis (Md.). Email her at [email protected].