In any dealership, there are going to be problems. Low unit sales, bad CSI, personnel issues…the list can go on and on. But when the F&I department has issues, it can be devastating for a store. F&I accounts for such a heavy amount of profit, usually right behind the service department, that it’s important to be able to identify problems and implement solutions to fix them quickly.

There could be any number of problems that could be impacting your F&I department. Here are the most common problems with some suggestions on how to handle them to minimize damage to our store’s PRU.

  • Bad CSI Results/Chargebacks – There is no sugar-coating this one. CSI scores can have a big impact on the dealership and serves as a barometer as to how you are meeting the needs and expectations of the customer. Blow this and there is hell to pay.

You have to look at not only how efficient the process is from the sales floor to the F&I office, but also the personality of your F&I manager. Bad CSI in this area usually means a bad fit. You have to be a people-person to be successful in this role and if he/she cannot make any kind of meaningful connection, the scores could suffer.

Chargebacks generally (but not always) mean one thing…a dishonest presentation. The buyer may have been lied to or tricked into buying a product they really didn’t want.

The Fix: If your store has the capability, videotape some of the transactions to see if there are teachable moments for F&I staff that are struggling. Let them watch and have training in place to help correct behaviors that are impacting CSI.

Have the F&I Director randomly call a few of the customers who are charging back and ask why they decided to do so. Not necessarily to save the product but rather to simply get to the bottom of why it happened in the first place.  That can uncover all kinds of interesting insights as to what’s really going on in the F&I office.

  • Low PRU – A case could be made that many of the reasons in the last section could apply here as well. Bad personality fit, sketchy sales ethics, etc. While those factors can contribute to low PRU, there are other reasons while profits are sinking that may not be so nefarious.

A lack of quality training could be a cause. If the F&I managers are not properly prepared to sell all the products the way you want them sold or if they simply don’t have a clear understanding of how to execute a consultative sales presentation, they need better training.

Other reason for low PRU could be poor interview skills prior to the product presentation. If they are not asking the right questions upfront, they will not know what products the buyer is most likely to bite on.

The Fix: This is an easy one. Spend the money on professional trainers to come to the store or send them to F&I ‘school’ where they he/she will get intensive, one-on-one guidance to help them add hundreds to their PRU. Good training will also help your managers learn what questions to ask and help them feel more comfortable getting to know the buyer and their lifestyle as it pertains to offering the right products.

  • High Turnover – This problem can be a bit tricky to identify. All dealerships suffer from turnover problems at some point. Salespeople come and go quite a lot but when you start to notice that F&I managers are not lasting long, there are generally two big reasons for it.

First, take a look at the compensation plan you offer. Is it realistic based on the mix of new/used or finance/lease numbers at your store? An even simpler way of looking at it…does the plan make it easy or hard to make a good living in F&I? If you are losing good F&I managers, money could be the biggest factor.

The other reason for high turnover could be simply hiring the wrong people. Many dealerships promote a salesperson from the floor to the F&I office without knowing if they are suited for how different the two roles really are. It requires a different ‘touch’ and if they are not able to adapt, they won’t last.

The Fix: Hire from a broader base than just your sales floor. Not every salesperson will make a successful F&I manager. Consider an outside hire. Make sure they have a realistic view of the job and the ways in which F&I is different. If they still don’t work out, you know that you have taken all the necessary steps to avoid turnover issues right from the start.

None of these common problems are ‘unfixable’. It takes a clear and impartial eye to identify what is wrong and how to fix it. The most successful dealerships see these problems as challenges to help push them to be better and more profitable.

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Kristine Cain is a freelance writer who loves the car business, hiking long trails, and the Steelers (not necessarily in that order). After finishing a degree in psychology at George Mason University in Virginia, she got her first taste of the dealer world working in the service department of a high volume Honda store. Warned early on that the car business would ‘get in her blood’, it did and Kristine made the leap into F&I departments at several stores around the Washington DC area and later to an automotive information company in dealer sales. A veteran of over 20 years in B2B sales to dealers, she leverages that knowledge to help write within the dealer market. Kristine lives in Holly Springs, NC with her husband and family.

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