7 Creative solutions for Successful F&I
Peter Jones, Galt Enterprises was the speaker for this session. He spent some time at the beginning discussing the Red Flags Rule. It seems that there is a level of uncertainty on this subject and dealers had a lot of follow up questions. He recommended this site, www.afip.com, as a good resource for laws and ethics.
Peter started off with a time line in the industry for F&I, talking about when this industry started using the menu system. Which is an interesting subject for me. I am still curious how many dealers actually use a menu system for selling backend product and how successful it has been. But other then the timeline, there was no further discussion on it. He talked about when the financing loosened up and how backend profits increased as the result of it. His 7 solutions were as follows:
7. The Daily Doc Sheet - This was his creation on daily tracking of sales for every department. With Projections and Goals for each month.
6. Retro Programs - Definitely a choice dealer principals would have to make with an attorney or an accountant. My front line experience with a retro program was short lived. I know the short term payoff is not good, costs are higher, but if you think of it as long term, like retirement money, then you may get a decent return at the expiration of each policy. Seems a bit risky to me.
5. Get Down Payment - Something touched on by the finance panel the day before. With smaller advances, you'll need to make sure to get the down payment to maintain higher grosses per deal. When getting a down payment for the customer "Don't ask how much down they have, tell them how much they will need"
4. Cultivate Local Lenders - This has been successful and challenging for us. Credit Unions are your best choice here. You just have to meet there parameters and customers have to become members when you do a loan through them.
3. Compensation Plans - Compensate employees in your store who push PPM, and extended warranties. Customers will see service employees as neutral bodies that don't have interest on the sale of backend products.
2. Proper Sales Process - Sales must support F&I for it to be successful, ensure the sales team complements your F&I process.
1. EZ Pay System - Work with you credit card processor to allow recurring charges. Similar to how the "Home Shopping Network" does it. "Buy today for only 3 payments of..."
Overall Peter gave a good presentation. Two ideas stand out for me. The compensation plan and the EZ pay system. I would have liked to see more information on a menu system, which I know his company has. I have my own that's in it's infant stage. I need to see more of other menus to see how mine compares. Implementation of the menu system seems to be the biggest struggle from dealers I've talked to. Maybe next year.
That's "My Take"
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