F&ICommentary & Insights

F&I
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Bubble Wrap: Follow the Logic Filled Road

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We have all ordered a product that was shipped to us most likely in a cardboard box. Inside that box, the product we ordered, was probably covered in bubble wrap. You’re familiar with it, right? The transparent, pliable plastic material with the regularly spaced, protruding air-filled hemispheres whose sole purpose is to protect the fragile contents of the box. Bubble wrap provides exactly the right level of cushioning protection needed to make sure your products arrive safely after being shipped. Most of us own a smartphone these days. It’s probably fair to assume, many of us purchased a protective case when we bought the phone. We can’t keep our phone in the box it came in wrapped in bubble wrap if we want to use it. So, we bought the case, which is the functional mobile version of bubble wrap for our phones. Did we buy the case because we thought the product was bad or would break? No! That’s why we shelled out the $1100 for the latest greatest gadget.  The phone was expensive and we know that at some point, we are bound to have a clumsy moment, where we drop the phone, or worse yet, it falls out of a backpack or pocket. The thought of the phone striking down on the ground and cracking the screen is horrifying. This is especially true if you don’t have AppleCare. Therefore, we spend a small amount of money to protect our investment and keep it safe. The bubble wrap and phone case are to the phone, what a service contract is to a vehicle today.  Costly repairs have skyrocketed due to onboard computers, high-tech electrical equipment, sensors, switches, diodes, radar, cameras, and touch screens – all of the non-maintainable components. Vehicle service contracts not only protect the vehicle, but they protect the consumer by creating AND forcing a budgeted monthly plan. It is because of this agreement to pay for the covered repairs that a consumer can have a fully managed payment option, thus increasing the probability of a pleasant ownership experience. The Necessity for a Vehicle Service Contract The more ways you can explain how consumers protect themselves and their investments, the more buy-in you will have because they will identify with these logical behaviors. You are simply leading them down the logic-filled road. The more things you can get them to agree with you on, in terms of protection, the more likely you will demonstrate the necessity for a vehicle service contract.  You wouldn’t ship valuable fragile items without packing peanuts or bubble wrap, would you? Is anyone walking around without a case on a cell phone? These are just two small, everyday examples most of us overlook as an avenue down the logic-filled road to commonality and “agreement in principle”. When we arrive at “common Grandville”, we connect, and the transference of enthusiasm and excitement happens. The next part is simply using logical mathematics to illustrate how much better the protected payment is, especially because of the increasing costs of breakdowns due to the replacement factor instead of just repair. There are many different ways you can try to convince a consumer that they need a vehicle service contract. There are so many closes, and honestly, they all have their own validity and effectiveness in their own way. The problem is getting comfortable with how you explain it. If you don’t understand the comparison, you are making or can’t effectively communicate it in a way where you break it down to something so basic and common, the consumer will feel like you are trying to mislead them or they will altogether not follow along and will likely decline because they are afraid of making a bad decision, not because they don’t see value in it.   By scanning the above QR code with your smartphone, or following this link you can watch THE BUBBLE WRAP CLOSE! Practice it and customize it to your liking. I think it is just one more tool in your belt when pushing to improve your effectiveness in the business office. Go forth and profit! #bing #morewinning
hammer on car
2021: Will Your Car Dealership Go From Success to Hot Mess?

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I’m not one to sugarcoat a crisis, but the pandemic has created at least one happy consequence for car dealers — vehicle shortages . With people everywhere urged to avoid public transport and chip shortage, car sales have hit a record high and demand continues to outpace supply.  So after years of making very little selling new cars, dealers are finally laughing all the way to the bank. No matter the franchise, no matter the location. Car dealers everywhere are having their day in the sun.  Do you know what that means? Some will get burnt.  Whether it’s in 6 months or 12 months, manufacturers will catch up and flood the market just like pre-pandemic days. And the car dealers who did nothing but bask in the glow of their success? They’ll start to feel the heat.  The best car dealerships know that success has a nasty habit of breeding complacency. So while the foolish rest on their laurels, the wise are working to future-proof their businesses.  The best are using this opportunity to examine what’s working (and what’s not working) in their business; their strengths, and their weaknesses.  They know that it won’t be long until competition for buyers is back on, and they’re taking proactive steps to finesse their operations; now, not later.  They’re getting ahead quite simply by getting ahead.  Make sure you’re one of those dealerships. Otherwise, instead of laughing all the way to the bank, you’ll be crying all the way to the bankruptcy court.  Now is the time to ask yourself this: What is your dealership doing to improve and prepare your operations for the future? Remember that when demand exceeds supply, sales training and excellence take the backstage. If you’ve got the cars, the customers will come. But when things reset, will you be out of practice? Out of shape? Out of step with the car dealers that took the time to get organized and stay ahead of the game?  If you’re not sure how to answer that, consider how much time your dealership spends fine-tuning these all-important aspects:  Sales Processes How regularly are you reviewing? When you review your sales, are you considering not just quantity of sales, but quality ? Are you confident in your staff’s product knowledge? Are they confident in their product knowledge?  F&I Product Lineup  When was the last time you took a good hard look at your finance and insurance product lineup? Are you sure it’s up to date and working hard for your business? How about your reinsurance structure? It all adds up. Readiness to Buy  No well-meaning car dealership would wish failure on another, but the hard truth is that not all dealers will survive the downturn. Are you ready to mobilize cash quickly when the opportunity comes to buy a dealership?  Advertising and Marketing  Sure, you don’t need it right now. But when supply outweighs the demand, dealers will be competing to turn customers' heads. Will you be placed to shout the loudest? Plan out your advertising and make sure you’re ready to make that investment when the time comes.  These are just some of the strategies that will separate the winners from the losers. The good news is that there’s still time to decide which side of the line your dealership will be on.  These good times are well deserved. But don’t expect them to last. Even more importantly, don’t get caught out when the tide starts to turn. Use today’s flush to build a better, more resilient business for tomorrow. 
cash deal
Have You “Lost Interest” in the Cash Deal?

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After a recent F&I Master’s class, I came back to the dealership better, stronger, and faster than before. That class taught me about having a conversation with purpose. So, since we are having a conversation anyway, let’s make it count? This is the biggest opportunity on cash deals to move the needle. Especially if you are working in a high-line store catering to affluent customers with higher credit scores.  The One Pay Lease Many business managers forget the least used tool available – The One Pay Lease. To a cash customer, this is a way to purchase the vehicle by writing the dealership a check for the total of payments on a 36-month single payment lease. Nobody talks about this and even fewer people are proficient at this technique. This is what separates the average managers and professional grade F&I pros.  Explain the advantages for a customer to consider a single payment lease as opposed to simply writing us a check. It costs far less because there is less interest and lower rates. This makes it less expensive than a traditional lease and paying cash for people who enjoy driving the newest cars. Lastly, the credit approval is easier since they get all the payments upfront.  The Cash Deal in Disguise The cash deal has evolved and sometimes is a “finance deal in disguise.” People actually walk in with a shoebox filled with dirty 20’s and 100’s that they have been hoarding during the pandemic. Now that the world isn’t ending, they want to get rid of it and come into our dealerships in droves with cold hard cash. It’s a great reminder, if you collect $10,000 or more in cash, report it by properly filling out the finCen8300 form. If you aren’t sure, my advice has always been, “when in doubt, fill it out!” What is a cash deal in disguise? That’s when you get the cash buyer who is really just using an outside lienholder. You will still need to present your options menu however. Most F&I managers will print up a CASH menu and start their presentations.  After reviewing how much each product is in terms of overall total cost, they are forgetting that if the customer is using an outside lender, the customer is ultimately going to be making a payment. In this instance, it’s still important to review with your customer, based on the terms of their own financing, what the base payment will be and then what impact adding these protection items can have on that monthly payment. Ultimately, closing the sale on a payment, even though it’s “cash”. Present these as finance deals with different payments and you’ll be surprised how much more product you will successfully enroll your customer in. Show it to them in terms that make sense to their budget. On true-cash deals, sell the value in the product - that’s all you can really do. When they use outside financing, appeal to their budget and explain how much this will benefit them. How does cash affects pricing? I get asked all the time if customers can get a better price if they pay cash. My answer is always the same. “We give the same great pricing to ALL of our valued customers, regardless of how you choose to pay for the vehicle.” Other than the occasional factory rebate that is connected to financing, the dealership’s selling price is the same whether it’s cash, lease or retail installment sales contract. Having an attitude of gratitude. Appreciate and welcome the cash deal. Best part about a cash deal? Not worrying about funding issues! The only thing you have to do is be a great salesperson. As Jim Rohn once said, “if you stoke the fires of their desires, and you’ll not fail to make the sale!”  Remember, if a person can sit down at your desk and stroke a reader for $85,000 - they can certainly add $5,000-$10,000 more for whatever protection options they want. Don’t be afraid of the cash deal or the cash buyer. Those are usually disciplined, persistent, highly intelligent people with four common traits: capacity, ability, stability, and equity. They want to buy; they just can’t be sold. You’ll have to earn it the old-fashioned way, by being genuine and serving them with the heart of a teacher and the right spirit of intent. Remember to try a one pay lease for a great cash conversion, present the outside finance deals like regular finance deals, and on true-cash, put on your selling shoes and tap in! #bing #morewinning
Automotive Careers: What It Takes to Move Up the Ladder

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F&I is a position in the dealership that provides excellent opportunities, but it is a career that comes with extremely high expectations and demands. In traditional thinking, the lot attendant might aspire to selling cars someday. While the salesman who has either started a while back or is a new hire is already thinking, someday I want to be a sales manager. There is always the desk manager who never worked in F&I and wants to grow. What about the F&I pro who might want the opportunity to run a store and serve in a GM position? And finally, there's the GM who wants to buy in and become a partner or a dealer in the end.  We are all trying to advance ourselves and our careers, and that is a good thing. And then there are some people who realize they are better at some things than others. This means it's okay to "stay" in sales or "stay in F&I." This is a GOOD thing! I am not trying to discourage anyone from following their dreams or pursuing their goals. I am however, encouraging those who have a passion to learn more about F&I to take a moment and think hard about the requirements and skillsets needed to perform the tasks, execute the responsibilities of that role and perform them at the highest levels of excellence.  The key to greatness is the business office is twofold. The first is being really proficient with paperwork, filling it out neatly and completely. Having an eye for mistakes while still being able to move quickly is paramount. You have to be the person who sweats the details inherently. This is one of the more important qualities to hone as a strategy in the world of F&I for moving up and getting promoted into a manager position within that department.  The second skillset you must possess is the ability to gain common ground quickly, establish trust and credibility, and being viewed as authoritative and consultative while not coming across as arrogant or 'salesy'. This is imperative so you can present and gain acceptance of participation for your products and services. Typically, salespeople are either really good at filling out paperwork, but they can't sell or close a deal. Or you can't read their handwriting (when it's present), but they can outsell the whole floor. It is much rarer to find an individual who possesses BOTH qualities and executes at the highest levels. Those are the people, who with the right guidance and proper training and development, can be molded into high revenue producers with great CSI and 5-Star online reviews - the ultimate in "more winning!" Salespeople who are just selling cars because it's a "job" or they are doing it until something "better" comes along need not apply. Those that fear being rejected and have the inability to move forward definitely can't stomach the life of an F&I professional. You must be a great listener who asks all the right questions and remembers that everyone is a prospect for something we have to offer in order to be excellent in this profession. The appeal of the warm office on a cold day, waiting for salespeople to bring you closed deals, comes at a price. That price is: you have to be the best closer in the store, who can break down a deal, check it for errors, fill in all the blanks, submit and electronically digitize the various components of the deal with all the different portals and logins, and then present the options and contract the deal – quickly, effectively, compliantly, and profitably – all at the same time, while remembering to smile! When you can do this and still keep a positive attitude even when you run into mistakes constantly, you know you might have a chance to make this a career and start your climb! #bing #morewinning #noextrachargeforapositiveattitude
Everybody is Your Friend, You Just Haven't Met Them Yet

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I was leaving my building in downtown Denver, heading to the dealership in Boulder this morning and I was thinking to myself how grateful I am to have the most wonderful circle of influence that I have in my life. Not just because of the people who had mentored me over the years, but also for the people I had found over my career who cared about me when they didn't have to.  In this business, I have discovered that we don't simply sell cars and complete the necessary paperwork. We end up being three things: a detective, a psychologist, and a babysitter. Our main priority, above all else though, is to protect the dealership. Our second goal is to serve the guest and maximize profitability. So how do we do this when we are working with total strangers, as opposed to the repeat and referral deals? Smiling. Live for the smile of the day! Put your guests at the heart of your business and constantly strive to scratch their record by injecting a touchpoint and creating a moment. Your ultimate goal should be to have your guests leave your dealership and share the word about your world-class service and come back as customers for life.  We want to cement our customers to us. That's why we sell prepaid maintenance and service contracts. We want to create the exceptional experience our guests deserve. The best way to do this is to start becoming the most positive person in the dealership – make your daily goal to infuse excitement into every deal you can. If you have a genuine passion when you work with people, they will be able to tell. Authenticity is key! Successful business managers know that they have to have readiness & integrity to get the job done correctly beyond the passion. Have you ever noticed that some people always seem to be "lucky" and other people always seem to "be on the struggle bus"? It's not by accident, usually. Over the last eighteen years in this business, I had realized that when I was a rookie in F&I, I would become easily upset about a deal that didn't go my way. I felt it was my god-given right to sell every one I met something. I've learned that the less pressure I put on myself to sell something, the more people buy from me. I find it is much better to have fun with the process and transfer that energy and enthusiasm over to the customer. When a customer is having fun with you in your office and enjoying "the process," the amount of time you spend with them diminishes in their eyes. The old saying, "time flies when you're having fun," is so true.  Becoming a connector of people is how we make a living in this business. The first dealer I worked for used to always say, "go meet the people." Make friends with everyone you meet. The truth is, everywhere you go, you will meet and encounter people. Why not make sure that everyone you come in to contact with gets connected to you. Meaning you tell them who you are, where you work, and what you do.  Following this simple step, which does take effort, will lead to you building your circle of influence much more rapidly and much bigger than you could imagine. I can't tell you the number of people who started as total strangers walking into my office, walked out, gave hugs, exchanged cell phone numbers, and became Facebook friends. The best part about what we do is the relationships we make. The real finesse in F&I is managing your relationships. Not only with the customers but with the salespeople, the lenders, and everyone you come into contact with. If you can master your ability to connect with others somehow, you will master this profession just as surely. Every deal is an opportunity to make a friend. 
Cupcakes and Etch in the Finance Department

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Sometimes even the best pros in this business will get a deal thrown at them that they know is an uphill battle from jump street because of how it was worked. The appearance of any opportunity is gone. This is where a true F&I pro will push pause and think before reacting compared to the know it all rookie who huffs and puffs about a "cash deal." The deal has to be done whether you make any back-end profit or not, right? Therefore, being upset about getting a stripped-out cash deal doesn't change anything except your mood right before you process the deal, important! Instead of being crapped out, look at it as two things: a challenge, and a teaching opportunity. I recently had a deal where a salesman worked the deal as hard as he could and the desk agreed that the customer would pay $40,000 OTD. They were going to send the customer to his bank to collect his cashier's check and then complete paperwork with me after he gets his money. The salesman asked me if I wanted to talk to him before he (the customer) left, I said, of course, I want to talk to ALL of the customers. I said, go put your paperwork together, just like a regular deal, then I will do his paperwork and review any options he has available, give him his total, and send him to the bank. After immediately bonding with the customer and knocking out all the basic forms, I went into my presentation. After careful review of the customer's offerings, the customer picks the vehicle service contract and hands me a credit card for the $2,873. He then left and an hour later came back with a cashier's check for $40,000. What just happened? The salesman actually convinced himself that he had gotten it all. It might have been all he would pay for the truck; it wasn't all he would spend on his protection options. Moral of the story - don't give up before you've even tried! Challenge yourself to stick to your process and show the salespeople who don't really believe you have a shot that you not only will take it 100% of the time but that sometimes you'll actually get it! The salesperson's teaching moment is that once a customer writes the check, they have made the physical and mental commitment to finalize or admit on paper they are purchasing something. It is always better to make all of your offerings BEFORE you have them take that last step and write the check. That way, all of the F&I products can be considered before making the final buying decision. The other situation that pops up from time to time is the deal that has to be written at buy rate just to get it done, so your efforts might be less motivated than if the deal had two points in it and they would only buy the vehicle if we could protect it with a VSC and GAP. How many of you desire to do a buy rate deal with etch? Not many people. This is the customer who has bought three vehicles from me in the past and always bought products and been very agreeable on the rate. Her score was in the high 600's, but this time around, the extra options just aren't in the budget. Do you push to get the deal bought and close it anyway? Absolutely. This is the lady who brings in gourmet cupcakes from whole foods before you've even prepared a first pencil. Five years ago, when she was a stranger and a new customer to the store, I offered a VSC and GAP. She shot me down on both. I persisted that GAP would be highly beneficial when a total loss occurs. She then takes the GAP and a year later totals the vehicle and is relieved to learn that because of my recommendation, she gets to walk away from that mess and start over with me fresh again instead of having to write a check for $6,000 to become a pedestrian. Recognize that you have built a loyal relationship with a customer and that not every time they do business will be a favorable deal to the finance department. Remember though that how you make them feel, and how the salespeople see you treat the deal will impact your future dealings with both parties. Sometimes you just have to eat the cupcake and be thankful for the etch.