F&I Practices That Won’t Help Your Bottom Line


Transparency, customer-centric: they’re buzzwords that are so overused they are becoming cliché. In the retail automotive environment, there’s still plenty of room for transparency and a customer-centric experience to be implemented. In no department is that more necessary than the F&I office.

Much of the focus has been on the sales process prior to financing. The needs assessment, the walkaround, negotiation, and sales agreement have all been inundated with the need for openness and a focus on what’s best for the consumer, not just the salesperson or dealership. If that’s where it stops, the customer will get turned off as soon as they enter the F&I office where the ‘five-finger close’ and back-end profits have harbored.

You want customers to leave with a sense of trust and loyalty. That’s precisely why you should get rid of these four age-old F&I practices in 2018.

The F&I Office

After making a sales agreement, the customer is led into a separate office where the payment they’ve agreed to will be driven up, up, up. The person with one finger in their credit bureau and the other four in their wallet appeals to the customer’s emotional side to boost back-end profit. It’s all in a separate office where the customer is completely out of their element.

Get rid of the F&I office. Alternatively, have an F&I manager enter the sales process on the showroom floor, where the customer has already become comfortable, to provide options. The four walls and closed door are intimidating and can negate all the trust the salesperson has already worked so hard for.

Handwritten Credit App

Information security is of incredible importance today. You don’t want to be responsible for your customers’ information getting into the wrong hands. In today’s automotive marketplace, there’s no reason for a paper copy of a customer’s credit information to float around the dealership. Scrap the app on paper, opting instead for an all-digital credit application on a computer or tablet. It can be the customer’s own device or a supplied tablet, powered by RouteOne, DealerTrack, or a host of other solutions. It can take down walls, leading to a less stressful customer experience in the dealership.

Interest Rate Markup

Once a customer has qualified for financing, F&I managers are commonly presented the option to mark up the interest rate on a customer’s car loan. Of course, there are financial rewards to doing so at the dealership level. But that inflated interest rate can seriously damage a customer’s opinion of your store.

If the customer decides to look around for a better financing rate, the F&I manager is faced with either dropping the markup or losing the deal. Either way, interest rate markup has the potential to seriously damage the customer relationship.

Individual Products

A customer is already feeling battle-worn from the sales process. Just when they think it’s over, they need to decide on a bunch of individual products. Undercoating, rustproofing, GAP insurance, life and disability coverage, extended warranty – the list goes on. It becomes a frustrating process that customers hate.

First, determine what would benefit your customers’ need best. Then, after that assessment, present popular packages that simplify the F&I process. Of course, they’re all customizable but present an easier, more customer-centric approach to F&I products.