The F&I (Finance and Insurance) department is often the last phase of the vehicle buying process. Strategic interaction between the F&I Manager and the customer plays a critical role in overall F&I profitability. Well managed interactions allow F&I managers to properly assess their customers’ needs in relation to their driving behaviors to match them with the right F&I products. Highly successful F&I managers understand that the skills and attitude needed to excel in this role can be learned and developed over time. Therefore, we have created a list of F&I Manager tips and best practices to run a successful F&I department.
What is the F&I department, and what does F&I Manager do?
The Finance and Insurance (F&I) department is one of the key profit centers in a dealership. When a customer buys a vehicle, the salesman refers the customer to the F&I department. The department offers add-ons to customers’ vehicles to protect their purchases, such as vehicle service contracts (VSC) and GAP insurance. In addition, the F&I Manager helps the customer find suitable auto loan options and handles legal documents related to financing plans and agreements.
The F&I Manager has one of the most critical jobs in the dealership. Notably, it includes obtaining competitive financing options for the dealership’s vehicles buyers, maintaining compliance to protect the dealerships from legal issues, and creating additional income by selling F&I products.
Here is a more detailed description of the responsibilities of the F&I Manager:
- Leverage opportunities to offer aftermarket products, service contracts, and insurance programs
- Knowledge of F&I products and services and ability to sell “intangibles.”
- Assess buyers’ needs—finance and payment options to present them with appropriate auto finance plans
- Knowledgeable in state regulations regarding finance and the Fair Credit Reporting Act
- Abide by federal, state, and local laws when preparing paperwork, finalizing financial transactions, setting interest rates, and working with lending institutions
- Maintain the highest ethical standards serving as a finance director and/or Manager who is committed to a high customer satisfaction index (CSI)
- Building positive relations with the lenders and insurance vendors
- Maintaining current knowledge, learning more, and training staff about finance and lease programs
Tips for F&I Manager
1. Nurture your relations with lending institutions, VSC provider, and insurance vendors
Many buyers look for financing options when buying a car. While the consumers can get auto financing from a bank or credit union, it could be cumbersome and perhaps on less favorable terms. Building a positive relationship with your lenders will enable you to get special financing approved for your customers. In addition, it could significantly improve your customer’s experience and satisfaction. It is essential to consider that building and nurturing positive relationships with lenders, VSC providers, and insurance vendors do not happen overnight. In other words, staying connected with them and maintaining your network would require frequent communication. Therefore, setting up time every week to strengthen your network is a good idea.
2. Stay current on tech tools knowledge and review reports
With changing shopping preferences and behavior, digital tools can support your success. Adapting the technology to save your customers time and enhance their experience would add much value to your dealership. In addition, using data and reports would enable you to make better decisions. However, if tech tools are new for you, refresher courses and training could help improve your skills and make you a pro. Notably, setting time aside to pep up your skills would help you move ahead faster.
One of the best ways to build a new habit is to identify a current habit you already do frequently and then stack your new behavior on top. This is called habit stacking. For example, “When situation X arises, I will perform response Y.” After I conduct weekly training for my team, I will take time to learn a new productivity tool.
3. Reassess market changes and profit centers:
Being updated with the market shift and trends and aligning your F&I portfolio to match the customers’ needs require regular consideration. Not to mention, monitoring your portfolio will keep you adequately equipped to serve your customers and stay relevant in the market. For instance, when the car inventory return to normal or close to normal, how will it impact the used car prices? How would the F&I products align with that scenario?
4. Conduct save-a-deal meetings:
Each week, take time to review dead deals with other managers to identify solutions and see if there is a better way to go. Review the three C’s of credit. Namely:
Character—defined by credit and loan repayment history.
Capacity- measures income and ability to service a loan or line of credit.
Collateral- asset(s), in this case, the car you have them on.
A fresh set of eyes and ideas with your colleagues could help you find constructive outcomes and raise your dealership’s profitability.
5. Attend and conduct weekly F&I and sales training:
Weekly sales and F&I training are excellent resources for you and your team to stay updated and efficient. Moreover, conducting weekly training would present you with opportunities to optimize processes and practices through methods such as role-plays. Additionally, taking support of result-driven professional F&I trainers would build your staff’s confidence and techniques, thus, improving your bottom line.
How to become F&I Manager:
Dealerships want F&I managers who possess the necessary skills, driven attitude, and experience in a dealership setting. Here are proven tips to help you become a successful F&I Manager:
The first step towards starting your journey to become a successful manager is to obtain professional training. To emphasize, F&I Manager training has several benefits, including objection handling, closing deals, compliance, and ways to enhance customer experience.
Acquire F&I products knowledge:
Connect with your current F&I department to learn from them. Ask questions, go through the product brochures, and learn about the products your dealership offers. Another excellent way is to get in touch with professional dealership consultants to discuss your career progression and obtain guidance.
Customer centricity helps develop a consultative selling approach to close more deals faster. Additionally, we found that having the right basket of F&I products to suit the market conditions and customer requirements accelerates growth and procures higher benefits. Furthermore, identifying customers’ needs and customizing product packages as per their needs sets you and your dealership towards development. As a result, you could become a successful F&I Manager.
Start small to accomplish big goals:
Remind yourself of your ‘WHY’ and use setbacks to improve yourself and develop a go-getter attitude. A positive attitude shapes your decision, which leads you in the right direction and ultimately determines your success. If you make no effort in 365 days, your growth will stagnate. If you make a small effort, your growth over the year will be considerable.
Here’s simple math to see how small changes lead to significant changes.
PRO Consulting is here to help you navigate daily challenges and enhance the productivity of your dealership. By all means, take advantage of our free consultation program for more F&I Manager tips or to get answers to your unique questions.