5 Steps to Better F&I Results

Avoid taking the "Rube Goldberg" approach to your F&I process

The straightest line to better F&I results is with modern technologies that incorporate interactive presentation videos, need-analysis surveys, and aftermarket product-decisioning tools.

Rube Goldberg was an engineer, inventor, and cartoonist known for designing complicated and humorous machines for getting work done. We use his name today to describe whimsical, overly complex practices, processes, and products where a simpler, easier approach would do.



We often “Rube Goldberg” the work we do in the dealership. We complicate tasks and limit results when we skip training and/or use dull tools. Sometimes we do this because we were handed outdated processes.

Other times we don’t think we can afford to learn the steps to saving time. But with modern technology solutions, we have better options and choices to, as they say in the film business, cut to the chase.

If you’re properly trained and use the latest presentation and selling platforms, you can work faster and offer a more pleasant experience for your customers. Most importantly, however, is how well you and your staff master the basics that support optimal F&I performance.

Here are five simple steps to help get you there.

Step 1: Master PVR production

To measure how you’re doing now, add finance reserve to your F&I products’ income, and divide by total units sold. Given today’s downward pressure on finance reserve, you can increase per vehicle retailed (PVR) by improving product sales penetration.

Sell customers on product value, and link the products you offer to buyers’ hot buttons: investment protection, vehicle protection, budget protection, family safety, and security. Help them recognize your products’ value. Using interactive sales tools and product videos helps connect with customers and drive that value.

Custom reporting also helps individual F&I managers set—and hit—specific targets.

Step 2: Improve sales penetration

To calculate current penetration, divide the number of F&I products available sold by the total units sold.

To increase this number, more deeply engage customers to develop rapport and trust, and ask better open-ended questions to reveal their concerns about value.

Top performers now use smart survey tools to analyze consumer responses and:

  • Learn about customers’ personal risk thresholds, and match that to the protection products offered by the dealership.
  • Gain insight into customers’ driving habits and ownership plans as clues to buying behaviors and interests. Again, knowing this information prior to the F&I stage helps you set up a focused presentation of products the customer is more likely to purchase.
  • Identify new product opportunities.

Step 3: Increase products sold per deal

A third step toward improved F&I performance is to increase the number of aftermarket products you sell per transaction. Service contracts and GAP are often the only aftermarket products offered to customers. But when you use F&I technology tools that present for you, however, you might be surprised at the response from customers.

To calculate your current success at driving this key performance indicator (KPI), divide your total number of F&I products sold by your total number of units sold. The average number among dealerships is 2.5 products—but don’t settle for average.

Your goal is to increase your average to three or four products, which then increases your product penetration and PVR. Offer more of your available products to every customer, and let them decide what’s of value and right for them.

A high-end menu system will ensure the right products are presented every time. Ask your F&I vendor for new ideas to help you increase the number of products sold per deal.

Step 4: Mind your gross ratios

It’s important to understand the relationship between finance reserve gross and F&I product gross ratios. Two calculations generate these:

  • Finance reserve ratio: Total finance reserve dollars divided by total F&I gross dollars
  • F&I product gross ratio: Total F&I product gross dollars divided by total F&I gross dollars

You want to generate a higher F&I product gross ratio. Remember, finance rate markup provides zero value to consumers, so focus on selling products that have real value to them.

Most of these products—service contracts and prepaid maintenance plans, for example—also build service volume and retention.

Interactive sales tools that incorporate a factory warranty review presentation with graphs and other visuals grab consumer attention, educate them on product value, and help sell your menu products. These tools help F&I managers demonstrate the genuine need for coverage, and offer the ownership experience customers want.

Step 5: Maximize menu utilization

I mentioned in Step 3 that using a menu system can help increase your product penetration and PVR. Menu-selling presents your entire product portfolio so customers can choose from a wider range of products they perceive as valuable.

The boost to F&I performance that consistent menu use delivers cannot be overstated. A 2015 MaximTrak survey of dealers that use e-menu technology revealed PVR lifts of $538, and 52% product penetration lifts.

The automotive market is only getting more challenging. Margins will continue to constrict, and legislative interest in F&I practices aren’t going away. The Rube Goldberg approach to F&I presentation is disorienting, distracting, and detrimental to your F&I efforts, and keeps you from delivering the coverage customers deserve.

Your straightest straight line to better F&I results is to use modern F&I technologies that incorporate interactive presentation videos, need-analysis surveys, and aftermarket product-decisioning tools.

Jim Maxim, Jr. is president of MaximTrak Technologies, www.maximtrak.com. Reach him at maxim@maximtrak.com.

Jim Maxim, Jr.

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