For many F&I managers, recent events and the effect they have had on our industry are unprecedented. For others, maybe not.
If you are younger than 33 and have been in the car business for a while, you have never experienced a market that wasn’t robust and thriving. Now many of you are reeling from the overnight slowdown in business and all the fears and concerns that come with it. For those who were in the car business in the good old days back in 2008 and 2009 — when Chrysler and General Motors were going bankrupt, no one was lending money, dealerships were closing daily and people were being laid off left and right — you know those were dark days.
For those who are relatively new to the business, even though the market isn’t so great right now, just as it did in the good old days, the economy will recover, and the car business will, too.
My advice to speed up your personal and professional economic recovery is to act. This is a terrible time to take a wait-and-see approach to your F&I business. Your responsibilities as an F&I manager haven’t changed. You still need to facilitate the delivery of any vehicle sold by accurately completing all the paperwork needed to transfer ownership. Your responsibilities haven’t changed in compliance and protecting the dealer’s assets. The importance of your influence on cash flow and customer satisfaction hasn’t changed. And your contribution to revenue through generating additional profit hasn’t changed, either.
What most likely has changed for many F&I managers are the number of opportunities you have each day to fulfill the responsibilities just mentioned. What’s more significant is that hopefully you have a greater understanding and appreciation of how important each opportunity is to you and the dealership than you may have had just a few months ago.
A very successful dealer I worked for wisely told me once, “In our business, good habits are learned in tough times, and bad habits are learned in good times.” I believe that is true. And if true, that means there may be a few F&I managers out there who have developed some “bad habits” over the past 12 years or so.
Touching a deal once should be a goal for every F&I manager. Now is a great time to tighten up your administrative skills. When volume is high and customers are plentiful, mistakes are sometimes tolerated. “He’s a great producer, but not very good on paperwork” or “She is great with customers, turns good numbers, but she isn’t as detailed-orientated as she could be.” Sound familiar?
Touching a deal once means complete and accurate paperwork every time. When volume is down cash flow is critical. As an F&I manager you can either positively influence cash flow by taking the extra minute or two to be sure your paperwork is tight and you have a fundable contract, or negatively influence cash flow through sloppy paperwork that creates a contracts-in-transit issue. My guess is dealers and general managers will now be tolerating less of the bad habits that contribute to contracts-in-transit and cash-flow issues than they may have in January and February.
Now might be a great time to do a compliance program self-evaluation. Look at your processes and program as a whole. Identify gaps and correct them. Maybe a compliance refresh for all sales, F&I and business development center employees is in order.
Speaking of self-evaluation, this might be a great time to do a deep dive on you. How is your process? Are you taking shortcuts? What have you done lately to improve your knowledge and skills? The revenue generated in F&I has been and will be a significant contributor to the dealership’s profitability. What can you do to increase your products per retail and profit per retail? Chances are it will involve some goal setting, training and development and then tracking of your progress to improve these key performance metrics. Reach out to your manager, your provider or training partner and ask for some coaching.
Right now, there are hundreds of opportunities in your service department just waiting to be contacted. Now might be a great time to dust off that service drive program and make it work this time.
What you do and how you respond to our current market will make a big difference in how far and how fast your professional and personal economic recovery will go. Don’t make the mistake of waiting to see what happens in the economic recovery.
Instead, decide to speed up your own recovery by making things happen.