F&I’s High Value Role In The Dealership

- By Ronald J. Reahard

The real key to success in any endeavor is to become valuable.  The more valuable you become, the more successful you become, and the more money you make.  Want to increase your income?  Get promoted?  Own your own dealership?  Become more valuable!   Your ability to sell products and ultimately your income is tied directly to your value to your dealer, the sales department, your lenders, and more importantly, your customers!

The question is, how do you become valuable?  I can always tell when I’m in the presence of a valuable F&I manager.  I can tell by the way they treat customers, by the way they treat their lenders, and by the way they treat their teammates.  Their primary goal in every interaction is to help the other person, not just themselves.  The more people they help, the more valuable they become!

Become Valuable To Your Dealer!
Certainly, an F&I manager’s income per retail unit determines to a great degree his or her value to the dealership.  However, customer satisfaction with their F&I experience also dramatically increases (or decreases!) an F&I manager’s value.  No matter how much income an F&I manager generates, no dealer today will tolerate dissatisfied customers.  Successful dealers know it’s not just about making a lot of money one month, it’s about creating customers for life.

You greatly increase your value when you help protect the dealership by ensuring everyone is familiar with the laws and regulations regarding obtaining and using customer credit information, quoting payments and interest rates.  Everyone involved in the sales process is responsible to comply with Reg. Z, Reg. M, the Sherman Antitrust Act, the Gramm-Leach-Bliley Act, the Patriot Act, the Equal Credit Opportunity Act, the Credit Practices Rule, the Fair Credit Reporting Act, etc.

Not only must an F&I Professional be familiar with these laws and regulations, you increase your value by continually training sales people and managers to ensure they are also in compliance when obtaining a credit application, pulling a credit bureau report, and negotiating the sale or quoting payments. A huge part of being a valuable F&I Professional is continually training your teammates to protect the dealership from potential litigation.

One of the best ways you can increase your value to the dealership is to become AFIP Certified by the Association of Finance & Insurance Professionals.  The AFIP Certification Program consists of college-level courses focusing on the federal and state regulations that impact every dealership and F&I manager on a daily basis.  These courses are designed to ensure F&I Professionals are familiar with the legal and ethical guidelines they need to know to perform their job within the confines of the law.   AFIP Certification clearly demonstrates your commitment to your profession, your intent to comply with all laws and regulations, and to conduct yourself in accord with the highest standards of ethical conduct.

Become Valuable To Your Sales Department!
As an F&I Professional, you have a responsibility to your dealership and the sales force to obtain an approval for every deal possible.  You become extremely valuable to your sales managers and sales people when they perceive you as someone who will do everything possible to put a deal together, hold a deal together, and protect the front-end gross profit.  When you help them sell cars by obtaining acceptable financing for customers with less than perfect credit, you become a valuable member of the team.

As the Financial Services Manager, you are responsible for evaluating the information contained in the credit bureau report to assist the sales department (and the customer!) in structuring a deal prior to submission to a lender, to increase the chance of receiving an approval.  You become a valuable asset to your sales team when you are able to analyze a credit bureau report, and you can answer their questions and educate them as to what lenders look at when evaluating a customer’s credit.  It’s critical you be able to assist them in structuring a deal to help obtain an approval.

A credit report reveals many aspects of a consumer’s borrowing activities, and all are considered to some degree when a lender evaluates credit risk.  The key to analyzing a credit report is to know what the primary indicators of risk are, so you can assist the lender in identifying the relevant predictors and assessing the potential risk, and help them justify approving a loan or changing a Tier Level.

Interviewing every customer prior to submitting the application to a lender allows you to learn the circumstances and details surrounding any adverse credit information disclosed by the customer or revealed by their credit bureau report, to help you increase your chances of obtaining an approval.  You must paint a picture of the customer for the paper buyer that will allow him or her to justify approving the loan, despite the negative aspects of the deal.

Become Valuable To Your Lenders!
Lenders are in business to approve as many qualified retail deals as they possibly can.  There are many factors that influence your paper buyer’s decision, many of which relate to your own personal code of ethics, and which you can control.  When you develop and maintain a professional relationship with every lender, based upon honesty, integrity, and mutual respect, you become a valuable part of the credit evaluation process.

It is critical that you know what is important to your paper buyer, and what guidelines she used to evaluate a deal, so you can accurately anticipate her response, and structure the deal in advance to ensure an approval.  It’s essential to use the customer interview and any necessary support documentation to provide the paper buyer sufficient reasons to justify an approval.

Keep in mind, your lenders never see the customer.  All they see is computer screen with the customer and vehicle information input from the credit application, an on-screen version of the credit bureau report, and their own internal credit scoring system.  By learning the details surrounding any adverse credit information, you become a vital component of the decision making process.

As you evaluate a customer’s credit application prior to submission, you must not only learn what happened in the customer’s past, but more importantly, what is their current financial situation.  In addition to the credit score obtained from their credit bureau reporting service, most lenders today also utilize an internal computerized scoring system that assigns different numerical point values to various aspects of a customer’s individual characteristics to determine their credit worthiness.

Virtually all of these factors can be found on either the credit application, the credit bureau report, or on the buyer’s order/deal sheet.  Regardless of the scoring or evaluation system a lender uses, the customer interview and proper deal structure will allow you to compensate for weak areas by emphasizing the customer’s areas of strength.

Become Valuable To Your Customers!
The most important part of any F&I Professional’s job is to help every customer.  That means helping customers with good credit, customers with bad credit, cash customers, and customers who want to finance through their own bank or credit union.

You become valuable when you give value first, not when you try to add value later.  Give your customers information that they can use, without any expectation of financial return.  Let them know your service department hours, and that you provide free shuttle service if they need to drop their vehicle off for repairs or maintenance work.  Make sure they know exactly what is, and what is not covered by the factory warranty.

You add value to the customer’s F&I experience by confirming that all information on the purchase agreement is correct, and by reviewing their credit application, to enable you to arrange attractive financing.  You add value by helping them understand the criteria a lender uses to evaluate credit.  It doesn’t matter whether they’re financing through the dealership or paying cash, whether they have perfect credit, or horrible credit, if you pull a credit bureau report, you should review that report with the customer.

You add value when you ensure the information in their bureau is correct, and educate the customer as to the reason for their score, and how their score helps determine the interest rate they qualify for, based upon their tier level.  If there is information in the bureau that is not correct, you add also value when you provide the customer with information on how to dispute credit reporting errors.

Today, identity theft and credit fraud are huge problems.  You add value when you educate a customer who has not obtained a copy of their report within the past year, that when a thief steals someone’s identity, they look for someone with good credit.  They also look for people who don’t check their credit on a regular basis.  With their excellent credit, it’s something they really should do at least once a year, to ensure someone is not fraudulently using their credit and ruining their good name.

By giving value to every customer without asking or expecting them to buy anything, the customer recognizes you are trying to help them, not sell them.  Customers appreciate having someone take time to review the options, answer their questions, and help them make an informed decision with regard to those options.  They resent having to listen to a sales pitch.

Helping customers demands that you seek out, with eagerness, reasons why the customer needs each and every one of your products, and helping them see how that product will benefit them.  If a customer trusts you, believes you know what you’re talking about, and feels like you’re genuinely trying to help them, they will value your knowledge, expertise, and input.

A valuable F&I manager protects the dealership, is AFIP Certified, and helps ensure compliance by everyone involved in the sales and F&I process.  He or she also ensures every vehicle sold gets delivered, and the front-end gross profit remains intact.   A valuable F&I manager helps lenders approve as many deals as possible by providing them with the information they need to make a favorable decision.  He or she also creates an atmosphere where customers want to buy, by adding value to the F&I process.  Because valuable F&I managers don’t just make a sale, they make a friend.

The question is, how valuable are you?