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Data analytics in F&I – Remember, humans are behind the numbers

There are a multitude of concerns and challenges now that weren’t present in pre-COVID times.

When dealerships use data to take a more granular look at how the different departments are performing, it can uncover a lot – positive and negative. How much of a margin is held in sales? What is the average RO in service? Are parts personnel pricing for proper margins vs. local suppliers?

Data is critical to getting a snapshot of what’s working and what’s not. But there is one department where you must temper the objective and cold effect of data with the real-world expectations of human behavior…F&I.

Your F&I staff has arguably the most intense level of pressure to deliver every day for the dealership. They are tasked with bringing in the highest profit in the dealership behind service and with that pressure, people can struggle. They are only human after all.

Now imagine how much the expectations have increased in 2022 with F&I departments having made a radical shift to a more digital experience and losing some of that face-to-face human connection they thrive on to sell products and services. For some, it’s tougher than ever to deliver.

The data you gather on the effectiveness of your F&I department should be tempered by and seen through the filter of a changing selling process. There is a multitude of concerns and challenges now that weren’t present in pre-COVID times. What can data shine a light on?

Low new car inventory

There is also increased pressure to make the most out of every deal with fewer units to sell. Data can show if the shortage is helping or hurting PVR. There is some indication that since prices are higher for used cars, PVR is rising even with fewer deals. If it’s not, your manager could be struggling in selling and need a refresher in best practices.

Speaking of selling skills…

Data analysis can also let you know who needs help with their selling skills and in some cases, who needs to go altogether. But when interpreting that data, keep in mind the very real struggles your F&I team may be dealing with. Walk them through the numbers and offer help in refining selling tactics and talk tracks. Help them with effective interview questions and role play. Use the data you have as the carrot, not the stick.

More: Is your dealership team addicted to current sales compensation?

Throwing poor numbers at your F&I staff won’t endear you to them but if it’s done in the spirit of helping their performance, it can foster higher trust in management.

Tough decisions

Capturing data on your F&I staff can unfortunately shine a light on who may need to go. It may sound harsh but if data points like decreasing PVR, high chargebacks, and tanking CSI are pointing to one or more of your staff, it’s time for an often-unpleasant discussion.

You can uncover patterns with chargebacks, for instance, that can show an F&I manager that is packing payments (yes, that’s still a thing) or simply not disclosing the product details properly. Maybe it’s on most deals or it could only be on ‘cash’ deals. But refined data analytics will show if your F&I provider offers it or if the dealership has analytics baked into its existing DMS or lending platform.

But having this level of detail ultimately protects the dealership from any termination liability with raw data to back up the decision to let an F&I manager go. Sometimes it’s simply the best thing to do for your dealership and for them. They may not be suited for F&I and the rigors that come with it.

Data can be used as a tool for positive change or to seek out solutions to failing performance. Either way, be sure to always remember that there are humans behind the numbers and when leveraged well, data can help everyone be better.

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Kristine Cain
Kristine Cain
Kristine Cain is a contributing writer for CBT News. She has over 26 years of experience in the automotive industry specializing in F&I and B2B sales.

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