Let's play Jeopardy. Answer: “This pays for itself with one more car sold a month.”
Question: What is the most overused and under-delivered closing line that dealers hear from vendors?
Dealers endure countless number of vendors asking for their business, and the finance & insurance office is a prime target.
The question to answer is whether the vendors have gone beyond the initial sale to help the dealership be more successful.
The end of the year is an ideal time for dealers to evaluate whether lenders, service contract providers, and other F&I vendors are doing more than just asking for business.
The different product offerings are endless, all of which have some value if properly used.
But are vendors helping you implement and fully realize the potential they tout in their sales pitches?
Specific to the F&I department, the initial question is whether you are happy with your per-vehicle-retail revenue and sales and finance penetration levels. Rather than just looking to replace yet another F&I manager, look at your service-contract provider's performance — or lack of it.
Some basic questions to get answered:
- Is your service-contract agent there only to drop off supplies and brochures, or are they actively involved in your store with ongoing training efforts? Training and introducing new and legally compliant sales methods are essential. If your numbers are not within or above accepted performance benchmarks, or have not improved, the representative needs to take steps required to make them better.
- Have they provided an effective menu or helped offer a template for designing one that is proven to work well?
- Do they only visit F&I people, or do they ever stop by the service drive and look to provide assistance there as well?
- Have they ever spent time examining your sales and F&I processes to determine whether any potential improvements or changes are needed?
- Do they regularly listen to and evaluate F&I managers' customer presentations?
- Do they provide regularly updated detailed reports or tracking data to help measure performance metrics?
- Are they readily accessible and attentive, or is it, “On the Tuesday after Easter I'll be in your area.”? While some finance companies' agents drop off rate sheets and a dozen Krispy Kreme doughnuts, others provide solutions and more. The best representatives can help you create incremental sales.
- Do they inform the sales desk of the current programs and rates, or do they only spend time in the finance office? Rate specials and finance incentives not shared may cause lost sales opportunities.
- Are credit parameters and depth of buying explained fully to both F&I and the sales desk? Again, it's unacceptable to slow up or miss a sales opportunity because your managers aren't fully aware of programs offered. With the emphasis lenders place on a suitable application to booked loan conversion rates, it's in their interest that the dealership understands what will be bought.
- Are they helping to ensure that your contracts in transit are not backing up, delaying you getting paid quickly?
- Do they get involved with their credit departments to help resolve problems when necessary?
If you are not getting the service levels you need, it might be time for a talk with or a change in providers.
Bryan Dorfler is a finance & insurance consultant. He's at [email protected].