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Which F&I Products Should You Sell Online?

On this week’s episode of F&I Today, Becky Chernek explains why making all of your F&I products available online may not increase profits, and how you can build trust and loyalty without sacrificing your bottom line.



Speaker 1: F&I Today, brought to you by eLend Solutions.

Becky Chernek: Welcome to F&I. Today I’m your host Becky Chernek, and I’m so happy you’re able to join us today. And we all know that F&I is vital to the dealership’s bottom line. So that’s where I’ve come in. I’ve been in the automotive industry for more than 30 years, and in finance and insurance since 1989. I’ve seen a lot, and I know how to get impact that sticks. I’ve worked with hundreds of dealers over the years with amazing results.

Becky Chernek: And since I began my career in the automotive finance business back in 1987, I’ve seen several national recessions. The markets crashed, banks closed, people lost their homes, their jobs, and their savings, or all three. And as you might imagine, every time the car industry was deeply affected. And as always before, recovery produced more prosperity than ever before. But the reality of today’s economy is unpredictable. And so when the market experiences instability, I always remind myself this favorite quote from a former UK Prime Minister, Harold Wilson, who was no stranger to recession.

Becky Chernek: And he said that the only human institute that rejects progress is the cemetery. No doubt if you’re familiar with the F&I industry, you know the name Pat Ryan. He’s described as the father of finance and insurance, because he basically dragged the auto sales industry out of the dark ages by establishing F&I as an office department in dealerships, and when he was only 26, Ryan introduced the idea of dealers shouldn’t only offer the consumer financing arrangements at the time of sale, but also other benefits including their credit, life and disability insurance, plus another of today’s main same product offerings, the service contract.

Becky Chernek: His idea took off quickly and within a few years, his idea had exploded into a $15 million business. By the end of the 80s, Ryan had formed the AON Corporation with 28,000 employees and $1 billion worth. Today AON employs over 50,000 people, but it wasn’t all roses and sunshine in the beginning.

Becky Chernek: When Ryan first introduced his revolutionary idea to the auto industry, he had his fair share of detractors. After enough time had passed, the dealers began to see the opportunity to generate additional backend profit, the idea was accepted enthusiastically. And today, every dealership has an F&I office. Another benefit of Ryan’s initiative enabled dealerships to take advantage of re-insurance profits. And most dealers benefit greatly from this.

Becky Chernek: But increasing profits through the sale of products has to be kept in balance with building customer trust and loyalty. Today’s dealers have a long list of products that they offer consumers. Service contracts, maintenance, tire and wheel, etch, key replacement, paint and fabric protection, GPS, LoJack, dent and ding, gap, engines for life. The list goes on and on. But which products brings the most value to the consumer while generating wealth and high profit margins for the dealer? And what’s the most effective and efficient way to present them?

Becky Chernek: Is there any reason in the world why every value product shouldn’t be available to the consumer? Which products for specific dealers make the most sense? The answer to these questions influence the end result. So in understanding that offering an endless amount of products F&I doesn’t always lead to profits.

Becky Chernek: So let’s talk about you and your dealership. Before you make any decision about which products to offer your customers, you need to put your primary goals on paper. This gets you to think about it, and seeing the whole thing in black and white ensures you recognize the reality of your current situation. Is your goals just to offer whichever products will bring the most back end profits? Or is it to increase the backend profits while building a successful reinsurance portfolio? Unless you put your primary goals in writing, you won’t know what needs to be changed or why.

Becky Chernek: Once you know your goals, ask yourself some questions. Take an assessment of all the products available to you. Is this the best product of its kind and the right price? Do you have a complete trust in the product company? What is your product partner’s expectations and can you meet them? Can they meet yours? Can you fully support the products? Its value to your customers, and what are the pros and cons? Will your F&I manager agree and be enthusiastic about the product?

Becky Chernek: Ironically, very few dealers ask their F&I managers if they think that their products on their menu have real value over similar products. This is a mistake. Unless everyone can get fully behind the product, they won’t be successful in presenting the product or overcoming customer’s objections. The only way to know for sure if your product should be on your menu, is to compare products and perform a thorough research, especially in today’s market climate.

Becky Chernek: Every dime a consumer spends must have proven value. The bottom line. Presenting your menu with a long list of products won’t always increase profits sold. If anything, it can actually end up confusing your customer and causing them not to buy at all. Today’s car buying customers are smart, informed, and cautious, and they’re looking for the best quality, the lowest price, and the best terms on everything. And dealers have to be prepared to answer every question candidly, convincingly and conscientiously.

Becky Chernek: Well, 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 F&I consulting services at (404) 276-4026. My specialty is providing F&I training, helping auto dealers achieve a high level of performance and profits by improving internal processes that begin the moment the customer touches down on that dealership website, and ends with finalizing in-person transactions and F&I. Get all your managers on the same page. Call me for a complimentary analysis of your business portfolio. Are you getting the best return on investment on your book of business? Find out today. Call me directly.

Speaker 1: F&I Today, brought to you by eLend Solutions.

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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