I recently had the pleasure of working with a dealer group who believes that it is critical for the success of their dealerships to ensure that sales and F&I work together as closely as possible. As a matter of fact, they insist that all sales managers, general sales managers and general managers, attend all F&I training with the F&I managers and F&I manager candidates. They believe that all managers in the variable operation of their dealerships should have F&I knowledge and a solid understanding of compliance.
They have learned that the best outcomes occur when sales and F&I are working together to maximize each opportunity, and that when everyone is on the same page, self-administered accountability is increased and compliance risk diminished.
The roles of the F&I manger and sales manager have evolved, they are not as defined as they once were. In the interest of streamlining the sales process, sales managers are routinely performing tasks that traditionally have been the responsibility of F&I. Requesting credit reports, submitting deals to lenders performing credit interviews, to name a few. When the sales manager has limited or no F&I experience this can sometimes foster an environment that can create some communication issues, compliance risks, missed gross profit and disfunction.
To be fair, the sales manager position is one of tremendous responsibility in the variable operation of any dealership. They are held accountable for all activities that generate revenue in the sales department such as, incoming phone calls, BDC leads, walk-ins, the activity of each salesperson they are responsible for, appointments, deliveries, gross profit on every deal and the development of their team. In other words, they are very busy. Take into consideration the sellers’ market we are currently enjoying in many places and it easy to see why some sales managers without F&I experience can tend to focus on a “yes”, but not necessarily “the best yes”.
Transferring F&I knowledge to sales managers is a good idea for all stakeholders in a deal. If you are an F&I manager or general manager, I would recommend that you examine the F&I experience level of your sales management team. Do you have a sales manager or two that have limited, or no F&I experience submitting deals and interacting with lenders? If so, you may want to be proactive in gaining an understanding of their knowledge of deal structure from the lender’s perspective, their understanding of your current lender’s guidelines, and compliance.
The whole purpose in having the sales manager submit deals for approval is to streamline the process. Having a clear understanding of which deal should be submitted to the select lenders who have the highest possibility of approval is step one in creating better deal structure, maximizing options, and streamlining the approval process. Review each lenders guidelines with the non-F&I sales manager and share what they are looking for in PTI, DTI and LTV.
Use a discussion on compliance and Truth-in-Lending to bring up how terms are presented to the customer and how important it is for the customer to have options when finalizing their deal in F&I.
Being visible and assisting the sales manager by taking a T.O., participating in one-on-ones and helping to select the right vehicle for those credit challenged customers can go a long way in building a collaborative and cohesive sales and F&I relationship. This is also a great time to reinforce the importance of compliance and transfer your knowledge to the manager without F&I experience.
Compliance is one of those things that everyone has heard about, knows is important but, admits when exposed to what is required and consequences that may arise if not adhered to, that they could know more about it.
Let them know that compliance isn’t a skill that can come from years of sales experience, it is based on education and training, situation awareness and discipline to process. Start with Personally Identifiable Information and go from there.
Bring them into the F&I office when the opportunity arises and show them everything that must happen in a deal from start to finish from the F&I perspective.
Raising the F&I acumen of all managers associated with sales is a smart move. If this process is more than you wish to take on by yourself, you might want to adopt the training strategy of the dealer group I mentioned and at the beginning of this article and commit to F&I for all non-F&I managers.
John Tabar serves as Executive Director of Training for Brown & Brown Dealer Services.