The Elimination of F & I

Customer experience, the latest hot topic on every dealer’s mind. The concept is bigger than customer service alone and is currently being exploited by e-commerce. With transaction times diminishing in every other aspect of retail, consumers are no longer willing to spend an entire day at a dealership buying a car. New technologies are being introduced monthly to speed up the process and start-ups are supplying customers with innovate ways to buy and sell a vehicle that do not include a brick and mortar building.

Will all this change circling, there is no question that an evolution is brewing. Early adopters are examining ways to create a new and efficient buying process. One concept gaining momentum is to eliminate the traditional F&I process.

The role of a Finance Manager in its purest sense is to get the deal bought and protect revenue. They are the most profitable employees in the dealership and the most expensive. On high volume days they are your greatest asset and worst enemy. The complexity of their process often causes transactional delays that at best negatively impact your customer experience and at worst cost you the car deal. Sure there are ways to cut off 10 minutes here and there but ultimately a funnel has to allow for everything to pass through. With a 4:1 average ratio of sales people to Finance Managers, even the most efficient process will cause delays for the customer.

What some public and private groups are realizing is you can protect the integrity of the F&I process without having the traditional F&I silo. Desking deals today is much different than it was even ten years ago. Technology has allowed for greater access of information replacing the need for experts in banking and finance. Menus can be automated and positioned in a way that gives the customer control of the decision making process. Warranty selection can be integrated into the sales process earlier to allow for a more seamless transition to ancillary product demonstration. The sales rep, who built the relationship with the customer, can be the one stop shop for all their needs.

The groups that have been successful implementing this new strategy understand two very important concepts:

1. Centralization. Someone needs to maintain the relationship with the banks and work on the deals that are more difficult to get bought. By focusing on just relationship management, one person can work multiple deals at a time and arguably be more effective in getting the deals purchased.

2. Training. A significant invest must be made to train the sales people on how to present the menu and warranty products. By having one person do the deal from front to back, ancillary products can be discussed earlier and more often.

Retailers respond to volume with volume. More customers shopping equals more staff on the floor and more check out lanes open. Automotive retail calls for all hands on deck during peak times yet the number of “check out” lanes remains static. Eliminating the F&I silo will give the customer what they want- a faster transaction time. Done correctly it can also give the dealer what they want- protected revenue and a happy customer.

“THE ROLE OF A FINANCE MANAGER IN ITS PUREST SENSE IS TO GET THE DEAL BOUGHT AND PROTECT REVENUE. THEY ARE THE MOST PROFITABLE EMPLOYEES IN THE DEALERSHIP AND THE MOST EXPENSIVE. ON HIGH VOLUME DAYS THEY ARE YOUR GREATEST ASSET AND WORST ENEMY”