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Getting the Most Out of Your F&I Partner
Aug 4, 2024
Dealers, Income Development, Why iAAWG
By Ian Vandenbark
National Director of Sales and Income Development
One of the most consistent things in the automotive industry is change. Just in the last few years, we have seen supply and demand imbalances, digital retailing growth, rising interest rates and an increasing number of cyberattacks, not to mention an unprecedented strike with the big three domestic manufacturers at once. Clearly, today’s retailers must be prepared for anything and everything.
One of the best resources for a dealership is their F&I partner. This partnership is one of the most important to a dealership, as it impacts every department, the store's reputation and even the dealer principal’s personal finances. It may come as a surprise, but getting the most out of an F&I partner depends not only on the chosen partner, but also on the dealer themselves, along with store leadership. Here are some insights and best practices for doing just that.
Consider the Different Support Levels
As a product provider, the F&I partner works to ensure the dealership is set up with the most ideal F&I products for both their customers and their business. In addition to installation and product training, they will help with claims, remittance of business and retention solutions (like maintenance plans or complimentary products). They also may help the dealer implement profit-sharing options, which provide dealer participation in the underwriting profit, or even provide reinsurance company options. In this case, the provider is responsible for the performance of the reinsurance portfolio and its profitability.
But it’s also important to note that an F&I partner can be much more than just a product provider: With income development, this partnership can further impact store performance and isn’t just about the right product mix or product knowledge training. Rather, the goal is to elevate day-to-day operations and take take profitability and customer satisfaction to a whole new level.
To do this, F&I best practices are installed and trained on regularly to continue personnel development over the long term. The income developer will do so by using role-play with staff, observing personnel during live transactions to improve deal results and offer coaching and feedback afterwards. The income developer will demonstrate best practices during customer-facing, live transactions. They will also help the management of contracts in transit (CIT), chargebacks, lender management and even help with sales, management and leadership training to aid overall performance and store culture. To ensure desired behaviors are rewarded appropriately and store goals are achieved, they will help design compensation plans. Given their vast experience and industry insight, they are also a fantastic resource in recruiting and interviewing, increasing the odds of a qualified long-term hire.
The Benefits of Income Development
The greatest benefit of income development is having a seasoned expert working with a wide variety of stores with different manufacturers, communities and cultures providing a unique perspective on what is and isn't effective, based on true field experience. Every football team has someone in the “crow’s nest,” or press box, with a much different perspective of the game. These experts can see setups and patterns which the players and coaches—at ground level—cannot, allowing them to identify opponent weaknesses and offer valuable feedback as a result. The income developer is much the same, in that they see store activity from a different perspective and are therefore able to present relevant solutions.
How Can I Get the Most from My Partnership?
Partnerships are built on trust, and trust is built through information, communication, and dialogue. The most important aspect is treating an F&I partner like a partner. Personnel movement, compensation plans and process adjustments should not only be shared with the income developer, but the income developer should be involved in these major decisions. Something to keep in mind is that no one at the dealership works for the income developer – the F&I partner is not at the store every day to ensure accountability. This is why it is imperative that store leadership make themselves available to build a relationship, understand the focus of each visit and develop a plan for accountability in between visits. Without this, the team will drift back to what is comfortable, meaning that little (or nothing) will change or progress.
Picking the right partner to support your vision is extremely important, but equally important is how you support them. Nurture this relationship and it will pay heavy dividends in profitability, positive winning culture and great CSI, with low turnover.
*This article originally appeared in AutoSuccess on August 2, 2024.