It is a typical day in the business office. The energy is high because everyone is on a roll. Then a salesperson comes in and says he has a cash deal. You can instantly feel your energy level drop. My question is, when did “cash” become a four-letter word to the business office?

The myth that you cannot make money on a cash deal may have started back in the days when F&I consisted of rate participation, vehicle service contracts, and credit life and disability. With a limited lineup, F&I revenue streams dropped by 75% when a customer paid cash. However, today’s product lineup gives business managers a great opportunity for increased revenue on cash deals. We just need to take it.

Here are some moves you can make today to increase your effectiveness with cash customers:
1. Adjust Your Attitude: Embrace the cash deal. We often take a negative attitude toward the cash customer. Maybe not on the first cash deal we get, but if we get a few in a row, we tend to pass those to another business manager. Try to look at cash deals this way: If they can write a $40,000 check for just the vehicle, then they can most likely write a check for $45,000 to add some much-needed security in their investment.

2. Find the Mendoza Line: Everyone has a minimum bank account balance they won’t cross — their Mendoza Line, if you will. When balances fall below that line, they usually have an idea of how they will replenish those accounts. It is just a matter of figuring out which repayment strategy makes the most sense for them; using their savings to replenish the account or financing the deal to keep their savings intact.

"When the checkbook comes out, it seems we too often shift our focus to converting the cash buyer to dealership financing."

3. Don’t Let Customers Write Checks in the Showroom: If a customer writes a check before getting to the F&I office, the business manager’s job becomes more difficult. We have all witnessed when a customer seems to develop a mental block about purchasing F&I products if he or she has already written the check to purchase the vehicle. Take some time to talk with the sales department. Explain the roadblock that is erected when this happens, and ask sales staffers to ask customers to hold onto their checkbooks until they get to the business office.

4. Maintain a Good Mix of Ancillary Products: Review your ancillary product lineup to ensure you have something for every type of customer. Cash customers often buy pre-owned vehicles, including older models. Add a high-mileage service contract to your roster and don’t forget theft, road hazard and appearance protection. These products cover a wide range of vehicles without mileage limitations.

5. Keep Your Eye on the Prize: Your job is to conduct a proper interview and present the products that make the most sense for the customer. When the checkbook comes out, it seems we too often shift our focus to converting the cash buyer to dealership financing. Wait until after you have established some credibility before you convert them. That way, if you are not able to change their mind about how they pay for the vehicle, you will still have a good opportunity to discuss F&I products.

After all, I’m sure we are all OK with a customer buying products in cash.

Dwayne Wiggins is a trainer at American Financial & Automotive Services’ F&I University. Contact him at dwayne.wiggins@bobit.com.