How to Use data to know the maximum F&I profit

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When you are running a dealership, you review data frequently.

Number of online leads

Number of ups

Inventory Floorplan and age

Marketing ROI to drive leads and sales

Number of leads that turn into sales

Cost structures and accounting data

You use software to manage the data and to help you find opportunities to increase results.

What are you using to verify your F&I department is selecting the best lender for each deal to maximize F&I Profit?

Data, when organized properly, can be a great “cheat sheet” to help your F&I team compare and verify maximum profit between lender decisions. Finding hidden knowledge, and laying it out for fast, easy understanding, is the key to maximizing your F&I PVR from lenders.

Today, you hope your F&I team works hard to uncover these opportunities. But since it’s just $100 or so per deal, any extra manual effort doesn’t seem worth the time needed to verify and confirm each deal is maximized.

Fortunately, we live in a digital world and have lots of data at our fingertips. Using that data to make it simple for your team to uncover these profit opportunities is easier than ever. 

The trick with lender decisions “data” analysis is to see the data in real-time to make the deal process faster for the consumer. Using data and calculations that review each lender’s profitability for your deals allows your F&I team to increase speed and accuracy on every deal. The F&I team can even give more opportunities to other lenders to make sure your primary non-captive lenders are giving you the best profitability. Captives statistically are used for 55% of all new vehicles and a mere 9% of used vehicle loans. That leaves many deals each month (likely close to ⅔ of all sales) using non-captive lenders.  What would an extra $100 for each one of those sales do for the F&I bottom line revenue? Remember that you don’t have to sell any more vehicles to increase your revenue. It’s all about capturing the maximum revenue for each F&I lender transaction.

Adding computerized data analysis to the mainly manual F&I review of lender decisions should be a no-brainer to maximize dealer profits. Traditionally, this has been done manually by the F&I manager through experience and guesswork. They often submit deals to their  ‘preferred’ lenders out of habit, and the focus of “getting the deal bought,” not because they are seeking to maximize each deal.  It’s all about speed and simplicity for the busy F&I manager to get the deal bought. 

Proper data analysis software, like ProfitIQ, can analyze lender decisions and instantly identify the most profitable lender offer to the dealership, which will change the ‘habit’ of submitting just to the preferred lenders. F&I managers can easily expand the number of lenders they send a deal to and validate they are getting maximum profitability. They will also begin to see the nuances of how lender programs make a difference in profitability each month. F&I managers will learn it’s easy to make more revenue (with less work) by not being on autopilot and sending deals to the same lenders every time.

Dealership use data and technology to manage just about everything. Isn’t it time to use data and technology to maximize F&I lender profitability?

If you are interested in learning more about ProfitIQ and ready to start capturing the many $1,000’s most dealerships are missing every month, please reach out to us at – sales@creditiq.com 

Kent Mihlbauer
Author: Kent Mihlbauer

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