F&I departments nationwide are once again facing challenging times. The one-two punch of the pandemic hanging on due to the Delta variant and the chip shortage has created a unique space where there are fewer new and used cars to sell and finance, and inventory is hard to come by.
It’s a mess. But even during wild and unprecedented times, there are opportunities.
This could be the perfect time to take a ‘get back to basics’ approach with the extra time on F&I’s hands. With fewer deals to do, F&I staff can refocus on activities that will help them be ready when the market comes back around.
Here are a few ways F&I can take advantage of this time.
Every F&I manager, regardless of their time in the industry, can benefit from the training offered both by their administrators and their management team. It’s easy to sideline that when times are good, and the showroom is busy, but the reality is that consistent training helps everyone in F&I from the Director on down.
Now would be a good time to reach out to your administrator to see if there is supplemental training being offered online to help staff with a review of recent training or new programs designed to help with the ‘new normal’ in F&I since the pandemic started. Every training program has had to pivot and now it’s a great time to make sure your staff is ready.
Slower times are perfect to run through compliance audits with staff. Look at the deals over the last few months…were all items in compliance? Are there opportunities to improve paperwork or disclosures? What was missed and what deals were airtight and provide a good example for all to follow?
Retool SOPs within the department if need be and make sure each manager is taking a fresh look at their deals and paperwork. If there are corrections to be made, better to do them now when there is time to adjust than to wait for the busy times to come back around when it will be harder to adopt changes.
Another easy thing to work on during the slower times is evaluating the F&I menu. If your existing menu of products is bloated and takes too long to present to your customers, now may be a good time to see where you can trim the fat and streamline the menu to just the high-margin products that sell consistently.
Consider an analysis of what products have sold over the last year and what hasn’t. Ideally, you want to sell as much as you can to every customer, but the reality is there are almost TOO many F&I products in the market, and not every offering makes sense for your customers. The data will make that clear.
Use this time to consider a shift to product bundles for some selling situations. Maybe construct a lease bundle that focuses heavily on appearance ancillaries. If your store has a high percentage of second chances buyers, try a bundle that offers products that reduce the risk for them and the finance companies (VSC, GAP, T&W, etc). Bottom line, this is the time to take a close look at what works and what doesn’t to help your department be ready when things pick up.
The chip shortage and its ripple effect won’t last forever, though industry experts are not optimistic it will correct itself before the end of the year. That said, now is a great time to take a back-to-basics approach to everything within the F&I department to help it be more profitable and more efficient WHEN the market gets back to normal.
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