A vital role of the F&I department is customer education. However, procedures and training in this domain have undergone substantial changes. On the latest episode of Inside Automotive, we’re joined by Cory Collins, a national F&I trainer for Automotive Reinsurance Concepts and speaker. Collins delves into how much has changed and which factors still impact the F&I department.
The financial and insurance aspects of vehicle sales fall under the purview of a dealership’s F&I (Finance and Insurance) department. This division works closely with clients to provide financing choices and assistance with buying a vehicle and its upkeep.
Key Takeaways:
1. Collins has observed several significant shifts in the F&I department, one of which is that customers are now more concerned about information, awareness, and understanding the benefits of the service or product than they are about payments and budgets. Collins believes, “The difference is night and day from what it was to what it is.”
2. “Managers are depriving themselves of enormous profit opportunities by not providing customers with necessary information.” Thus, in Collins’ opinion, the F&I menu is the cornerstone product of a successful F&I department. He further explains that there tends to be a more seamless transition from properly utilizing a menu during a transaction.
3. Collins visits 130 dealerships daily, and he has noticed a significant change in attitude, which affects the stores’ performance. As an F&I manager, it is essential to arrive with the sales team and set the tone for the day. This can be done by utilizing the time when everything starts back up, and the team can discuss possible improvements. Collins emphasizes that stores prioritizing team culture perform better than those not.
4. The F&I department significantly impacts every department in a store. Therefore, how a store operates is ultimately determined by the mindset of its F&I managers. Moreover, the success or failure of a store depends on the mentality of “that’s my job” versus “I’m a part of the team, and I want everyone to be successful.”
5. With the shift to EVs, Collins notes it’s like driving a smart phone. “It will get rained on, driven, and exposed to 90-degree heat. So there should be as much fear as excitement about the opportunity.”
6. A successful F&I department in any dealership, whether franchised or independent, should not live on F&I reserves asking for chargebacks. If your dealership asks for 20-25% back in reserve in gross profit, they aren’t doing it right. “They should be 70-75% product sales because they make up our revenue, then that’s a difference to the bottom line.”
“An F&I manager sets the tone for the day in a dealership.” – Cory Collins
