Back to Basics

Back to Basics

Knowing what is expected of the F&I manager translates into more fluid deals and higher profits for all departments. BY ARZU ALGAN

The main responsibility of the finance manager is to protect the deal. Sale of the vehicle should be the primary objective and that includes ensuring that negotiations go as smoothly as possible. This can be accomplished by separating the vehicle sale from the finance sale and avoiding any conflicts in between. There are, however, several key factors for which you bear the responsibility in securing the vehicle sale.

F&I managers have a high level of responsibility tied to their position as they serve as a model representative for the dealership. Appearance is the first thing people notice, and it makes a difference in a customer’s initial perception. Equally important is your attitude toward others, and your personality. An F&I manager should always strive to behave respectfully, personably and professionally.

Part of professionalism is the environment to which the customer is welcomed. It is a proven fact that decisions are made mostly by the impressions that the finance manager, and their office, gives. To do this, the atmosphere of the office should be calming, classy and pleasant. You can achieve this atmosphere by maintaining a clean office, comfortable seating, and keeping the decorations simple and professional but with a splash of the one’s personal life to create an inviting environment. All tools, brochures and evidence manuals should be within reach. After all, the more comfortable a customer is, the more relaxed and receptive they will be to your professional expertise.

It is your job to be your customer’s advisor, their confidant and their helping hand. Since they just purchased a vehicle it is important that the finance manager help them safeguard their newly acquired investment to the fullest extent possible. If the finance manager truly cares about the customer’s protection and believes in what they are presenting to them, it shows and establishes a connection that leads to additional product sales. 

The finance manager is in charge of presenting customers with all of the applicable products the dealership has to offer, without exception. It is very important that F&I managers are aware of all the services and products offered by the dealership, and that they can accurately describe them. Finance managers must be both knowledgeable and ethical when offering any product or service. Customer’s confidence in your knowledge will lead to their trust and, in turn, sales.

It is finance manager’s responsibility to know and follow both federal and state laws regarding sale and financing of the vehicle. Always fully disclose every aspect of the deal to the customer for the protection of the dealership. It is also the finance manager’s job to generate, complete and double check all necessary DMV, dealership and loan or lease documents before authorizing delivery of the vehicle. Even seasoned F&I managers should have a checklist to make sure all documents are properly completed and signed before the customer leaves the dealership.

Earning the trust and respect of your lenders is vital; never do anything to betray that trust. Do enough research on your lenders to get to know their underwriting guidelines and qualify your customers under these guidelines. Ask what the most common dealer mistakes are. It is less costly to learn from the mistakes of others than to make those mistakes yourself. Ask what their specific requirements are for approvals. The more you know, the better you can structure your deals to meet those requirements.

Successful achievement of potential F&I profit is dependent in large measure on how well a dealership’s sales department and finance department internally relate to one another. To work well with the sales management team, a finance manager should build and maintain a successful and professional relationship with them. They are, in essence, two sides to one coin. Vehicle sales and front-end gross is the responsibility of the sales department; however, backend profit, legal paperwork, credit approval and authorization of delivery are the responsibility of the F&I department. In order to maximize the total profit, both departments must work together on every deal.

There are problems that can arise when it comes to these two departments. One reason you lose profits is because either the finance department didn’t layout or fully explain all the services and options available, or the sales department did a poor job in acquainting a customer with the representative from the finance department. Problems differ in each dealership, but it is vital they are dealt with and resolved quickly and effectively to raise the profit margin of both departments.

Proper introduction is vitally important when it comes to transitioning a customer from the sales floor to the F&I department. The smallest comment with a negative inference from the salesperson can leave the finance manager to discuss their services in an unfavorable environment. The finance manager must also refrain from making negative comments about members of the sales team.

 The salespeople are very important to the dealership in general and the finance department in particular. Their job is what starts the process, and without their sales, no one else would have work. They are also the ones that build initial rapport with their customers. What they say about you helps to influence the opinion of the customer regarding you and your department. Salespeople must have confidence their finance managers will support them in securing the vehicle sale and trust the finance manager to protect the front-end gross profit.

If a finance manager really wants to improve their relationship with the sales department, attending sales meetings could be a key component. It lets the salespeople to know that the finance department takes them seriously. It also gives the finance manager an opportunity to share their processes with the sales department. Knowing how things work allows the salespeople to be more confident when recommending dealership financing and finance products to their customers. Let them know that you have the same goals by being quick and efficient in completing the F&I process and turning the customer back to the salesperson to deliver the vehicle in a timely manner.

Management meetings give the dealer a chance to review successes and failures with each department and solve problems. It is important for the finance manager to attend management meetings because it gives the finance manager an opportunity to learn the operations of the other departments and to understand their problems and accomplishments. This perspective often leads to better communication.

The business office is another important department of the dealership. They manage the dealerships transactions, so it is very important for finance managers to respect and maintain a great professional relationship with them. Be meticulous and organized when filling out paperwork going to that office. An error in paperwork can be a major source of frustration for your co-workers and can damage the reputation of the dealership with the customer.

Success requires teamwork and everyone’s best efforts. Each department has a part that is essential to the sale of a vehicle and you should do all you can to make things go smoothly, not only in your own department, but also in the others. Prove that your dealership is comprised of a team.