An effective F&I (Finance and Insurance) process provides another revenue stream to your dealership’s business. It’s important to approach this the correct way in order to deliver valuable deals to the right customers while focusing on the ultimate goal of increased financial growth for your dealership. 

Importance of F&I Departments 

Dealerships and automotive retail rely on F&I departments as they have the ability to improve profitability and bring in greater revenue for the auto business. With the additional products offered, F&I departments can provide expert advice on loans for customers while offering useful packages that help customers with their personal situations³. There are some tried and tested methods for establishing an effective F&I process, and we want to share the top ten ways with you!

What Is the F&I Sales Process?

A vital step in the buying process, F&I comes into play when customers who have verbally agreed to purchase a car are taken through the terms of the sale to discuss any upgrades for their new car¹.

The job of an F&I manager involves obtaining financing for the dealership's new and used vehicle buyers and creating additional income for the dealership via the sale of protective packages. This includes auto loans, insurance, protective packages, and evaluating their financial position by checking credit scores before approving the purchase².

Ways to Establish a More Effective F&I Sales Process

1. Train your Sales Team on F&I (and F&I on Sales)

It’s vital that your sales team has knowledge of F&I products. Training your team and giving them a chance to shine is a great way to produce an effective F&I sales process. Your sales team should shadow the F&I department. Working alongside them gives a new perspective on the finance and insurance products they can be familiar with when selling vehicles to customers⁵. 

This process can be reversed too, as F&I departments can work with Sales to establish customers’ needs and understand the type of product or situation a potential customer is in. If the right products are purchased, such as servicing, then customers are loyal to you. They need to visit your dealership when carrying out a service. Helping out with repeat business and increasing sales within the service department⁵.

2. Review your Current F&I Product Offering

Using the right F&I products for your customers will improve the overall experience at your dealership. Market trends can change in an instant and knowing the latest wants and needs of customers is difficult. If your products are constantly being reviewed, then checking these against market trends will put you at the forefront of offering your customers the best products for the market⁴. 

A recent NADA survey indicated car buyers are looking for certain accessory packages. Specifically, consumers want key fobs, tire and wheel replacement, windshield repair, exterior appearance protection, interior protection, and theft deterrent, in that order⁶.

3. Introduce F&I information on your website

Your website is an ideal tool for providing a dedicated section to sell your F&I services. Giving clear product information will help customers know what to expect when they visit your dealership in person.

The same NADA  survey showed 78% of car buyers would be more inclined to meet with an F&I manager if they researched available F&I products on a dealer’s website beforehand⁶.

4. Treat F&I products as Must-Have Features instead of just an Add-On

Tailoring to your customers’ needs shows that you take time to listen to their story and allows you to provide unique products. If a sales pitch is made up-front when a customer is not looking for F&I products, then this will waste time and reduce chances of a customer buying. Make the process personal and effective by getting to know the customer first and making sure they are informed on the benefits of the products the F&I representative offers⁵.

5. F&I Product Merchandising (in the Dealership)

For effective F&I product conversion rates, a customer likes to have an understanding on what products they might be pitched when buying their next car. A dealership has many ways to hand over brochures and sales material when customers visit in person. With eye-catching informative pieces, the marketing object can be achieved on a single brochure page⁷. Be interactive and engaging, and always consider the customer experience.

6. Get the F&I manager to meet the customer early

Simply put, the sooner everyone meets, the better. With a friendly face, a potential customer can establish the F&I department early to make them aware of the process that will happen later on. Examples include questioning the customer on their history with financing a car and what they enjoyed or were discouraged by with their past experiences.

Once a customer agrees verbally to purchase a car, the F&I manager should be made aware and greet the customer. Just a short and swift introduction will be fine. It reassures customers that they will handle the F&I process quickly and effectively³. 

7. Push for visual information with the consumer

It can be daunting for a customer to go through so much information in a short space of time. Therefore, a visual aid, such as a presentation, would be better for customers. They can show comparisons between products to ease friction and boost confidence³.

8. Full disclosure at every level (make sure your customers understand)

Going back to being honest and upfront, this is a vital step to make customers aware of all the T&Cs of the sale. Customers deserve clarity on how their payments are handled and what their payments will be. They all need to have transparency into any added F&I products, such as service schedules and their structure³. 

9. Following Up (If you don’t get a yes, why not try to again a little bit later) 

Recording if a customer selected not to go with your F&I offering and understanding why is essential for future success. Following up adds an additional touchpoint between the consumer and your dealership. Work with the customer and establish potential discounts that can take stalled deals and close them⁴. 

10. Taking Feedback

Always engage with the customer, whether it be with surveys or a casual follow up call to understand what could be improved. This can lead your dealership in a direction that outshines your competition and sets your store up for the repeat business⁴.

Conclusion 

F&I plays an important role in your success as it allows you to extend the services you are able to provide to customers. Building trust and developing relationships with consumers will set your dealership apart from others. Pay close attention to what’s going on during deals and interactions, and do your best to streamline engagement touch points in a way that elevates the customer experience. 

ACV is your partner in all things to grow your dealership. From securing and selling inventory through a digital marketplace to managing and merchandising, ACV is capable of helping you level up. Learn more about how ACV’s suite of solutions is designed with you in mind. Register with ACV here to stock your dealership with inventory that customers are looking for. 

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Sources

1. "What is a Finance and Insurance (F&I) department?," 2016. [Online]. Available: https://www.consumerfinance.gov/ask-cfpb/what-is-a-finance-and-insurance-fi-department-en-747/.

2. "Guide to F&I," 2021. [Online]. Available: https://www.line5.com/blog-posts/guide-to-f-i.

3. "Establishing an Efficient F&I Car Sales Process," [Online]. Available: https://www.autotrainingcentre.com/blog/establishing-efficient-fi-car-sales-process/.

4. V. P. Sanchez, "5 Effective Ways to Improve Your F&I Process," 19 April 2021. [Online]. Available: https://blog.vanguarddealerservices.com/5-effective-ways-to-improve-your-fi-process.

5. D. Vendrell, "How to Sell More F&I Through Sales and Service," 25 August 2020. [Online]. Available: https://www.jmagroup.com/resources/operations/tdawa/how-to-sell-more-f-and-i-through-sales-and-service.

6. M. Dykstra, "F&I Process Management Trends," [Online]. Available: https://autodealerinstitute.com/fi-process-management-trends/.

7. "F&I Advantage," [Online]. Available: https://impel.io/finance-insurance-advantage/.

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