A faster transaction line means more sales in shorter periods of time – it’s simple math. As we approach some of the biggest holidays of the year, it’s important to check people out quickly to keep your customer service level at the highest standard possible. No one likes waiting, especially during high-traffic holidays with the impatience of people are on overdrive.
The average transaction in a dealership takes up to three hours. However, according to The Academy (a training center for retail automotive professionals) customer only really be patient for ninety minutes. With the updating technological advances, customers are now more acquainted with an automated world, where one-click transactions have become the norm and status quo.
Most of the transaction time comes from finance and insurance process, rather than the actual haggling process. In recent times, the ‘haggling’ process has decreased in length, while the finance and insurance process does not seem to have changed at all. The finance and insurance offices have lagged in their ability to integrate digital devices and tools into their processing, leverage expertise in relationships, or create a structure that values performance to speed up the process for their customers.
Some of the biggest holdups in the sales process happen in the finance and insurance offices. These include:
- Deals not closed
- The accuracy of information going into F&I
- Amount of disclosure and compliance
- Objections from customer
- Length of presentation
- Amount of products
- Amount of paperwork
9 Ways To Speed Up Your Customers Transaction Time
We’ve compiled a list of some of the key ways that dealerships can leverage sales, relationships, and technology tactics to help get their customers in and out of the finance and insurance officers quicker and into their new vehicle sooner.
1. Start The Process Online
One of the biggest holdups in the finance and insurance offices is the sheer amount of paperwork that is required. The best way to combat this to move the process online and encourage your customers to try and complete as much as possible before they arrive at the dealership. This can be anything from an in-depth credit application, a pre-approval, or a pre-qualification – anything to cut the time that the customer spends in the F&I office.
2. Get It Right The First Time
When an F&I manager initially greets the new buyer, the first thing they should stay is “Congratulations Mr./Ms. [name]! I see you are purchasing [vehicle name] for [amount] dollars, is that correct? Following this script ensures that the customers, purchase, and monetary amount match up with the initial documents that the manager has. If something isn’t right, it is not simple to mark out and rewrite. Instead, it could involve the lender having to review and reissue the documents, hence holding up the process further.
3. Meet The Customer As Soon As Possible
Imagine a visit to the doctors – it’s not the time spent with the doctor that generally bothers people; instead, it’s the amount of time that they spend waiting beforehand. The same logic can be applied to the F&I offices at a dealership. A good rule of thumb is to ‘be urgent to serve, not urgent to sell’.
4. Go Digital
On top of moving as much as you possibly can online, there are other digital aspects that dealerships can integrate into their finance and insurance offices. By having an electronic deal folder in which all sales managers can upload all vehicle and customer information, along with structure information – can really help speed up everything that the F&I manager needs to input. Digital documents also help to keep in compliance as documents are easy to save, or search up and find later
5. Limit Negotiations And Discounts
As we mentioned before, the time spent on haggling has decreased as dealerships change their processes. The adage ‘time is money’ applies well to the F&I officer. If your dealership has not eliminated a large chunk of the time that is traditionally spent haggling, it’s worthwhile to look it’s the ‘near one-price’ strategy. This won’t completely get rid of the negotiating stage, as that’s an essential part, but it does reduce the time that’s spent with the sales staff going back and forth with new deals.
6. Change The Payment Structure For F&I Managers
Though improving personal speed is an integral part of the process, it can be further aided by implemented a payment structure that encourages peak performance of your F&I managers. So, a dealership could choose to put half of their total F&I department’s commission for a month into a pool with the rest paid directly to the F&I managers. That pool can then be divided among the managers based on the number of completed deals during that time period.
So, let’s say that if there were 300 vehicles sold in that month; Manager A handled 50, Manager B handled 150, and Manager C handled 100 – the monthly pool would be divided as so:
- Manager A would receive 17% of the pool.
- Manager B would receive 50% of the pool.
- Manager C would receive 33% of the pool.
This payment structure would then encourage managers to complete more deals faster by making their commission dependent on their overall performance and volume of transactions.
7. Build A Strong Relationship With Lenders
Lenders are not just companies that write checks to a customer. They are the gatekeepers that approve a deal and they have the ability to assist the F&I office in approving and processing a deal faster. Some lenders offer reward programs to dealership along with a few top-tier lenders having the ability to offer an approval within minutes – simply because of the relationship to the dealership.
8. Keep It Short
It is important for managers to explain what each document is to the customer. However, there isn’t a need to draw out an explanation when you can keep it simple and short. When making this shorter, you should keep in mind that it does not violate compliance issues. Managers can assist customers by handing them a pen, saying a short, rehearsed explanation of each document. The paperwork sequence should be the same for every customer. There is no need to jumble papers, ramble on, or search for items. Simply have everything ready to go for the entire process.
9. Combine F&I And Sales Functions
This seems like one of the most difficult steps that many dealers are unwilling to take, especially with their reliance on F&I income for the profitability to their dealership. However, ‘time is money’ and the dealers who have embraced this new combination claim that they won’t go back. It can be a huge time saver and have positive gains for their F&I income. However, it does take a blend of the right type of person with the right coaching to be able to make it work. Consumers prefer working and dealing with a single person. Once the trust is established, it’s easier to get past the price and starting focusing on the sale.
The time spent at the dealership waiting around, haggling the price over and over again – is something that most consumers dread. Especially since this new age of consumers hasn’t ever really had the need to haggle prices nor do they have any loyalty to a brand. As Gen Z’ers enter the workforce, dealerships and brands alike will find that they are less brand-conscious the previous generations. So, they need things done fast and as efficiently as possible.
To sum everything up, in terms of transaction times, it’s important to allow the F&I to have exposure on your dealership’s website. As prospective consumers are already searching for a possible vehicle online, when they land at your website, they’ll see the steps that you are taking to cut their time at the dealership. Digitizing the paperwork whenever possible, having the sales department load the deal with 100% accuracy, and pre-printing paperwork can cut down the process time.
All the steps above are compiled to make your transaction period just that little bit (or a lot) faster than it currently is. It’s designed to help you get to another level of customer service and allow your dealership to stand out among their competition.