The Road to ROI with F&I

In every business, quality of service is important for customer retention. When you provide excellent customer experiences, your automobile dealership can prosper. You can grow your dealership by improving the Finance and Insurance departments (F&I). According to the National Automobile Association (NADA), the finance and insurance department represent about 25% of all the dealership sales. Here are 5 ways you can improve your F&I process at your automobile dealership.

Car dealerships sometimes face unpredictable circumstances. Most urgent among them are employee no-shows or spontaneous resignations that can leave the managing staff in a sticky situation. 

During these times, fill-in F&I Specialists can ensure that the workday continues without a hitch. Keep reading to find out more about fill-in F&I Specialists and why you should keep them on call.

It's no secret that satisfied clients spend more than dissatisfied ones. When it comes to buying a car, arguably the most significant area of frustration and, therefore, an enormous opportunity to increase customer satisfaction is in the F&I process. F&I is a critical component of dealership revenues and profits. As profit margins on new car sales continue to shrink, dealerships must adapt their businesses to include an aggressive focus on F&I product sales.

Potential customers have more car-buying options than ever before. How can you make your dealership outshine your competitors? Here's four easy ways to start.

Your F&I department is a key influencer on your Parts & Sales business. Every department at a vehicle dealership depends primarily on an unpredictable flow of new and returning customers to make revenue quotas, but the sale of an F&I department product is a predictable opportunity to generate additional Parts & Sales revenues.

Every dealership wants to be more successful. Much of this has to do with the personnel. While the inventory, the pricing, and the showroom have an impact on success too, it is all for nothing if the sales team doesn't know what they are doing – and cannot put the customer’s needs first. This is why F&I training is so critical.

The sales team of a dealership is the primary connection between the customer and the location. This means that the sales team needs to be educated on all that is being offered and all that needs to be disclosed to the customer. Mandatory automotive F&I training can take care of this in its entirety.

The automotive industry is facing a dramatic demographic change. Millennials, those buyers who are 20 to 35 years of age, are predicted to become the largest, most important group of auto buyers within the next decade. Millennials have more information-gathering tools and better research skills than any previous generation of auto buyers; they are well-informed and have often already made their purchase decisions before setting foot in a dealership.

Although the business of auto dealers is selling cars, the worst kept secret is that F&I products provide the best margin in the industry.  Dealers that maximize these products do much better financially.  However, they have to be sure to meet all of the compliance standards or it could come back to bite them in the form of penalties.  For that reason Financial & Insurance product compliance is more important than ever before.

Dealing with the F&I office can sometimes be a bit of a trial. Efficiency issues run high, and this often leads to unsatisfied customers. When it comes down to it, efficiency and compliance still trump shorter visits to the F&I office. Fortunately those of us at Vanguard Dealer Services have effective programs for dealerships to improve their work flow.