February 11, 2008: Privacy, finance options missing in F&I department
February 11, 2008
Filed under Archives
These articles recap some of the opportunities uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits.
These are followed by recommended actions that address the issues. Our goal is to provide ideas to help improve your dealership.
Two years ago, the owners bought out an older, well-established dealership in a small, rural area. It has recently been moved from a small, 3,000-square-foot facility located in the downtown area to a 14,000-square-foot former supermarket building on the edge of town. The newly remodeled facility is partially visible from a main highway, but there is no direct access. The absentee owners originally left the daily operation of the business in the hands of the existing dealership staff.
The goal for this engagement was to identify and establish the processes necessary for the profitable operation of each department and the overall dealership. The previous article in this series addressed the sales department. This edition focuses on the F&I department.
The general manager/sales manager and a female assistant handle all the F&I duties. Neither of them have any background in this area, nor have they been provided with training.
There is no enclosed F&I office. F&I conversations are conducted in sales cubicles that are open to the sales floor. Conversations can be overheard by uninvolved customers and staff. It is vital that a private, secure area be utilized for this process in order to prevent violations of privacy laws.
Exposed deal jackets and credit applications were observed in at least one sales cubicle. Completed documents were not secured in locked offices or file cabinets. The potential for privacy act violations were significant. During the engagement, actions were being taken by the general manager to protect and secure these documents. It is essential that all concerned parties become familiar with local and federal laws that affect the privacy of consumer information, the F&I products and processes.
The only dealer financing options that are available to its customers are through the various OEM programs. No attempt is being made to convert cash or bank customers to dealership financing. Capturing the customer’s financing leads to increased opportunities for add-on sales of parts, clothing and accessories. It also provides the dealer with the chance to increase profits through lender participation (points).
The only other F&I product being offered is extended service contracts from the dealership’s OEM suppliers. Expanding the F&I products being offered, and ensuring that all these products are presented to every customer, will result in significant sales increases. An F&I menu presentation will accomplish this in an efficient fashion. The Gart Sutton & Associates’ F&I Menu was provided, and there was a discussion of proper construction and utilization of the menu system.
An F&I log was also provided. This log will enable them to accurately measure F&I product sales and also provide new opportunities for follow-up with customers who did not purchase these products at the time of the unit sale.
Although training would help in this area, hiring an experienced F&I person will help solve the majority of the department issues in the shortest period of time.
Establishing goals and incentives for F&I sales will help them improve and reward success in this area.
Author, speaker and educator, Gart Sutton has been retained by every major powersport manufacturer/distributor. He is a frequent keynote speaker for national motorcycle conventions and state motorcycle dealer association events. Visit www.gartsutton.com.