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.