The world automotive industry is expected to lose $110 billion in sales in 2021. With the U.S. being the #1 auto sales country globally, that is a significant sales loss for dealerships. Although the dealership industry held gross much better with the limited available inventory, they need to start looking beyond front-end gross to keep … Read more
According to the experts, the chip shortage creating the inventory problem will continue throughout 2021 and possibly into early 2022. Eventually, new vehicle supply will return to normal, and used vehicle prices will level off and fall back to the norms. I’m also positive that if you are reading this article, you are doing everything … Read more
When rates and reserve are about equal on an F&I deal, it’s critical to understand your ancillary product maximums per lender decision. Ideally, you want to select the lender decision that allows maximum profitability on any sold protection products. However, you also want to ensure that the lender reserve allows an adequate profit based on … Read more
There are two scenarios: Promoting or hiring a newbie into the F&I department and training them from scratch. Hiring a trained F&I director from another organization. Both have different cost structures, but they both need training and management oversight for a set time. If they are a newbie, they have to learn all the lending … Read more
The 80/20 rule applies to a lot of business factors at the typical dealership. I’m sure you can name 3 or 4 right off the top of your head. One 80/20 rule that may not come to mind is in your F&I Department, where 80% of your deals reach maximum profit and 20% fall short. … Read more
The chip shortage has created an inventory shortage that looks to be getting worse. It may be some time before the OEM’s get back on track with a steady supply of vehicles for dealers. The lack of new vehicles has increased the cost for the dealers to get used vehicles as well. The price increase … Read more
Why do we accept $1,500, $1,800, or $2,100 in F&I profit as ‘good enough’? We all know the ‘good enough’ mindset leaves profits on the table. Traditionally the work needed to capture the additional $40-$120 PVR most dealerships forgo has outweighed the profit reward. Thus, ‘Good Enough’ has become a dollar figure per unit sold. … Read more
The F&I managers do a great job of selecting the best lenders to submit a deal. They instantly have a good idea of what each lender looks for and what they will accept. Choosing lenders for the deal and getting callbacks is easy and fast for most F&I managers. The time-consuming part is breaking down … Read more
If you are an F&I manager and looking to increase your paycheck, experts and trainers recommend doing additional work to increase your income. Let’s think about that for a second before we jump into the recommendations. You are likely already very busy, and adding additional work and processes to your schedule seems a little unrealistic. … Read more
Customer downtime is a big issue when customers want the buying experience to be fast. I have heard F&I experts talk about keeping customers busy by printing out the declination or accept/decline documents for the loan term the customer accepted and an extended loan term while the F&I manager is getting the product menu ready. … Read more
