I Am New to F&I – Where Do I Begin?
If you are entering the world of F&I, the territory can seem overwhelming. “The secret of getting ahead is getting started. The secret of getting started is breaking your complex tasks into small manageable tasks, and then starting on the first one.” (Mark Twain)
Let’s take this advice to break down the F&I function into four categories:
– Physical Space
– Equipment
– Products & Services
– Daily Work Plan
Physical Space is allocated at the discretion of the dealer and general manager. The office does not need to be large, nor does it need to be located in the middle of the traffic pattern. In fact, a space just off the showroom usually works best. The F&I function requires a quiet room with a door that closes. The office should be large enough for a desk, three chairs, a file cabinet, and counter space for a printer and fax machine. The desktop area should accommodate a monitor with room to spread out the paperwork for a deal. A calculator is also a plus.
Organize your deals with a rack system. Four metal racks that fasten on a wall work well. Use one rack for deals submitted for approvals, one for deliveries, one for ordered units, and one for deals with pending funding or titles. The file cabinet or credenza is a good space to store forms.
The office should be clean and conservative. Silk plants, a family photo, and traditionally framed artwork on the walls add a human touch. Unobtrusive background music or sounds are optional.
Equipment: The dealer, general manager, or office manager will authorize a stand-alone PC or an integrated computer system for the F&I office. Either will work well as long as it allows you to produce the required paperwork for each deal, track productivity, and print daily and monthly production reports. You should also be able to generate a “pending finance deals” report which identifies every deal waiting for a title, high payoff, finance approval, or funding. Produce this report daily for the F&I office and distribute it to the dealer, general manager, sales manager and office manager.
The F&I office should have a dedicated fax machine, separate from other dealership departments. The F&I Manager must be able to receive and submit facsimiles to lenders without leaving the office. No other person should be able to intercept lender approvals and turndowns since this information requires the immediate attention of the F&I manager.
A telephone headset can give you hands-free ability to complete multiple tasks.
Internet access is very helpful. Many lenders now accept online credit applications. The web can open a wide world of lending sources. If you need to find additional lenders, go to www.geloans.com. Follow the links and check out authorized lenders in your state.
Products and Services: As F&I Manager, you need to read every policy from cover to cover. You should be able to explain each paragraph in these documents. If you are unsure about any policy item, contact the company representative to obtain clarification.
Learn about the vehicles your dealership sells. Make sure you understand the manufacturer’s coverage. Read one of the warranty booklets. Each warranty is LIMITED in duration and LIMITED in coverage.
Industry standard F&I products include service agreements, credit life/ accident & health insurance, physical damage insurance, GAP policies, paint guard, fiber guard, tire guard, and security systems, along with aftermarket products offered through the parts department. If your dealership does not offer these core products, you will want to make time to listen to company representatives who call on your dealership to invite you to retail their products to customers.
Be sure to read and understand your liabilities and rewards for selling these policies. Do not over sell policies to customers. Follow proper selling techniques and interview the customer before presenting your wares. Whether you are new to F&I or have been in the business for a while, you would do well to attend a professional sales seminar. Every skilled craftsperson needs to sharpen their tools. F&I Managers are no different. Education pays; it is not an expense. For every $1 dollar spent in training, the business reaps $30 in return.
Review the installment finance contract and supporting documentation. After you have a clear understanding of the paperwork, call the lenders to review their rate sheets and credit tiers and find out what it takes to get a deal approved. Every lender will have their own view of beacon scores and the circumstances of each deal.
Make an appointment to go to the department of vehicle registration (also called DMV) and review all state-required documentation and make samples for reference. Each state will have different forms and different views on who holds the title and where the liens appear on the paperwork.
Daily Work Plan: You will often be asked to perform tasks other than your F&I duties. It is easy to get sidetracked. You may have to verify with the general manager or dealer whether an errand or follow-up on lost opportunities takes priority. A follow-up letter to a customer who purchased a vehicle without a service agreement could mean extra dollars to the dealership.
Make time every day to mail five follow-up letters and to make five phone calls to follow up the letters that have gone out.
Make time every day to read an industry publication. Stay up to date on industry news.
Make time every day to speak to your lenders. Create a strong working relationship that will make the difference when you are working a tough deal.
Make time every day to ask the accounting office about the quality of your paperwork and improve your performance if needed.
Make time every day to meet with the sales manager to review deals in progress. Two great minds are always better than one.
Review the status of your goals every day. If you need help to reach your goals, ask for it.
Have fun every day. Laughter is a great stress release, and it makes time fly. Remember to say thank you to customers and colleagues. A little gratitude goes a long way toward creating a healthy work environment.
Finish your deal paperwork every day. Prepare for the next workday before you go home.
“How do you eat an elephant?” If you can answer “One bite at a time!” you’re on the right track.
We’ll see you on the road to success. Enjoy the journey! We do.
F&I Management and Technology, October/November 2001, pp. 32-33.