No merger of sales and F&I can be successful if product sales suffer as a result.  - Illustration by Dmitrii_Guzhanin via Getty Images

No merger of sales and F&I can be successful if product sales suffer as a result.

Illustration by Dmitrii_Guzhanin via Getty Images

Last month, America’s No. 7 auto retailer, Asbury Automotive Group, confirmed plans to eliminate the F&I manager and director positions at all 88 of its U.S. stores. In an interview with Automotive News, CEO David Hult said the move was the result of a successful pilot at a North Carolina dealership.

“Variable operations managers” will supervise hybrid sales and F&I managers. Salaried “product specialists” and a dedicated remote sales team will reportedly fill out Asbury’s front-end rosters. Employees will transition to a four-day workweek. T-shirts will replace dress shirts and polos.

Read: AutoNation, Sonic Set Records as Publics Grow PVR

Asbury is not the first retailer to eliminate F&I managers and will almost certainly not be the last. The 55-store Ken Garff Automotive and 23-store Walser Automotive have made similar moves in recent years, and who could forget “One Sonic-One Experience,” the hybridization initiative Sonic Automotive first announced in 2013?

What is driving this trend?

If there is a consensus among the aforementioned groups, it’s that hybridization puts the customer first. They only have to deal with one person. They are not abruptly abandoned by their sales professional the moment they agree to a price. And if it all goes smoothly, they will get home sooner.

Penetration rates for most products fell as the hybrid managers focused their efforts on service contracts and finance reserve.

Several years ago, legendary F&I trainer and consultant George Angus put the hybrid model to the test. He trained a group of salespeople to sell F&I products and complete compliance checklists. And they did fine in the first few weeks, producing about 60% of the income driven by a control group of dedicated F&I professionals — pretty good, actually, considering their lack of experience.

In the weeks that followed, they regressed. Penetration rates for most products fell as the hybrid managers focused their efforts on service contracts and finance reserve. For some reason, they increasingly failed to complete their disclosures, which sent cancelation rates soaring and created a serious liability issue for their dealership.

Read: Angus: Life Without the F&I Department

Angus recommended that dealers address perceived shortcomings and customer service issues in a way that does not include eliminating the business office.

More recently, the subject of this issue’s cover story, Continental Auto Group, combined sales and F&I into an hourly-plus-bonuses position at its four Anchorage, Alaska, rooftops. Dealer Marten Martensen and his F&I and sales directors, Cindy Merry and Larry Newell, say their new system has resulted in improved product sales and profitability — not to mention fewer chargebacks and higher CSI scores.

Give the Continental team credit for trying something new and succeeding. But notice they never intended to sacrifice any amount of product sales. Merry is as dedicated an F&I professional as you can hope to meet. She wants every customer to be protected. And so, to ensure Continental’s hybrid managers can do both jobs well, they are backed by support staff who take care of the nuts and bolts while the sellers sell.

The lesson here is that, while you can technically eliminate the F&I position, you can’t eliminate the role. It’s too important. The dealership needs the income and the customer needs the protection, and both are dependent on the hard work of trained professionals.

Read: Big Ideas Yield Big Results at Continental Auto Group

Author

Tariq Kamal
Tariq Kamal

Associate Publisher

Tariq Kamal is the associate publisher of Bobit Business Media's Dealer Group.

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Tariq Kamal is the associate publisher of Bobit Business Media's Dealer Group.

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