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How Your Process Can Make or Break You


On this week’s episode of F&I Today, Becky Chernek discusses how your process can either make or break you and how you can sell more cars and increase your F&I profits significantly while reducing your liability.

Video Transcription:

Welcome to F&I Today I’m your host Becky Chernek.  My boss once told me a process will either make you or break you. Running by the seat of your pants will diminish sales and profits–can be contributed to F&I bottlenecks and poor CSI.  

When was the last time you evaluated your process – is it working for you?  As some of you may know, I offer in-dealership training and consult with the entire sales team from the time the customer lands on the lot or dealership website from sales to desking to finalizing the transaction in F&I department.

Before I do the consultation, I like to look under the hood before I get started to give me a good idea of the dealership culture and process.  It’s pretty amazing what I find! Perception is one thing reality is quite another! I look for how deals are coming into the F&I office is there any sense rhyme or reason, self-discipline a consistent process in place?  Will the customer understand the terms of the sale – is there a true meeting of the minds prior to the customer going into F&I office? What kind of worksheet does the desk utilize is it being worked every single day the way it’s supposed to be?  

How often will the desk manager close the customer on extended terms with no money down using subvented interest rates or closes the deal with $50 leg with a specific payment quote. Is the worksheet signed by the customer or manager? Does it make sense to send the deal into the F&I office without the customer understanding all the terms of the sale and leave it up to the F&I manager to close the customer?

How many times will the sales manager use abbreviations such as WAC, OTD, OAC and why is this something that needs to stop. Speaking of which, I’m not even sure where the buyer’s agreement went off to? Since many dealers utilize the EPencil worksheet today buyer’s agreements just seem to be non-existent until the deal is wrapped up in F&I office. For the veterans who have been in the business for a while I think you can recall we used to have either a printed or written purchase order signed by the customer and the sales manager before the customer went into F&I office for delivery.

I understand, the EPencil is being utilized in lieu of the purchase order today however the EPencil is not complete or the terms are not confirmed and or signed by the manager or the customer. The F&I manager is left to close the customer either on price or payment or both. Customers seldom understand the terms that they agreed to. What don’t we understand about a solid paper trail? A solid paper trail will assure that the customer understands all the terms of the sale you leave nothing to chance or misunderstanding.  The purchase order or the EPencil matches the menu!

This is seldom the case and is unfortunate since this is likely the first thing an attorney will pick up on especially if it’s for a deceptive practice violation. I realize for some compliance is a four-letter word but it’s a necessity today if you expect to stay in business.  What policy and procedures do you have in place to assure the customer receives a copy of the Risk Base Pricing Notices, credit applications have been signed by both parties, driver’s license is valid hasn’t expired with a legible photo that matches the paper work, proper Adverse Notices have been mailed within 30 days and logged, you ran an OFAC on every customer not just your finance deals, you have a written and defined Red Flag policy in place, the customer receives a privacy notice and why do you give the customer a privacy notice to sign and are your offices secure, just to name a few.

The importance of a check list – oh, that’s a good one! Why do you have a check list in the deal and not fill it out? The complaints we often hear is that F&I manager just takes too long, isn’t fast enough – it takes them forever to get the customer in and out of the F&I office.  The one’s that complain the most are often times the worst culprits they usually are the ones who are sending the deals into the F&I office without the check list – customer is in a hurry, we’re selling cars today, let’s wrap this up.

 If the sales manager validates the check list is complete I assure you the customer will likely be in and out of the F&I office a whole lot faster. F&I managers should be sending the deal back to the sales manager if the paper work isn’t correct and in fear of getting critized by the sales manager for slowing the deal down they take the deal anyway and attempt to collect the information on the go.  

F&I is constantly chasing doc’s to put the deal together which slows the deal down and reduces creditability in the eyes of the customers. I don’t want you to think for a minute I’m putting all the blame on the sales department, the F&I manager has to do their end of the bargain too, they must engage earlier with the customer meet the customer at the sales person desk do an effective meet and greet, interview – review the documentation for accuracy get rid of the monkey on their back. This practice will assure the deal is straight and frankly if done consistently will help to train the entire sales staff.

The sales staff will come to realize that the deal must be right or it’s not going into the F&I office for delivery.  Make it a point to build rapport establish creditability earlier on in the sale.  Review the purchase agreement with the customer. Understand titling of the vehicle and that the customer acknowledges and agrees to all the terms of the sale prior to going into the F&I office before presenting the menu.

Get rid of anything that will reduce creditability or liability – build rapport and be more confident in your presentation efforts.  So, what happens when the customer doesn’t agree to the terms of the purchase price or base payment.  The green pea F&I managers learns real quick, don’t kid yourself here – if the customer doesn’t agree with the base payment they will immediately lose creditability – it makes it extremely difficult to close the sale and upsell products afterwards.

Let’s face it guys, step selling sucks! Menu selling is not step selling people and why are we still doing box closing, well that’s another topic for another episode? The minute the terms don’t match up you can bet the F&I manager will likely make it a point not to go over the base payment and some just take the base payment off the menu all together.  If you are utilizing menu selling for compliance purposes as well as performance the base payment and terms must be clearly stated prior to presenting the products.  We want to present 100% of the products to 100% of the customer 100% of the time.

Unfortunately, for some dealers the base payment is not on the menus – the F&I manager is using the menu to pack the products and close the customer.  The declination is a hit or miss. The declination/waiver is critical the customers agrees to what products they took advantage of and products they have declined.  The products purchased matches the finance contract and all products are priced and clearly itemized for the customer to understand. I am not advocating that the F&I manager delete any terms on the menu but I do understand why it happens.  

When deals make its way into the F&I office and the customer isn’t closed on the price of the vehicle or payment terms it becomes a slippery slope for the F&I manager to maneuver this is when alternative practices are utilized.  As you know, the F&I manager gets paid on products sold – and yes, they should be protecting the dealership assets but in fear of lower performance they take the road that puts the dealer at risk. So as my boss once told me and I have come to realize a process will either make you or break you.  

Establish and map out a defined process that becomes who you are.  Don’t rely on new hires to bring in their old worn out process from another dealership – make it clear to new hires that they follow the process your team endorses. I promise if you do this you’ll sell more cars and increase your F&I profits significantly while reducing your liability.

Thank you for joining me on F&I Today. Be sure to come back next week right here on the CBT Automotive Network for our next edition of F&I Today. Also, feel free to contact me regarding my consulting services. My specialty is helping auto dealers achieve high levels of performance and profit by improving internal processes that begin the moment customer touches down on the dealership website and ends with finalizing in-person transactions in F&I. Also, for our CBT Automotive dealers – contact me about my complimentary (1) roof top online analysis and find out what’s preventing you from taking the lead position!

Becky Chernek
Becky Chernek
Rebecca Chernek has nearly three decades of consulting experience in the automotive retail industry. She started her career by working with her father at their family-owned auto dealerships in Have De Grace, Maryland. She gained hands-on skills and experience in almost every aspect of the automotive sales process: new used cars and trucks sales, F&I, Director of Finance for volume operations and general management. Rebecca has helped hundreds of automotive car dealers throughout the U.S. and Canada streamline their processes and closing techniques and significantly increase profits.

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