Selling F&I at Independent Dealerships

February 18, 2021

If you own or manage a non-franchise dealership, which has no dedicated F&I Manager, you understand the need to start selling more ‘back-end’ products. You already know that this F&I stuff is a critically- important profit source, that will also serve to keep your customers happy and more likely to return or recommend you to others. Of course, your first task, now and always, is to get the iron over the curb.You get all that, but the need remains.

Let’s start at the beginning:  No matter how small your dealership may be, you already have a sales process, even if it’s just in your head, that you follow because it continues to work for you.  My experience has taught me that In order to succeed at F&I, all you need to do is to expand that process to include a few additional steps that are fully consistent with your current process and with what your dealership is all about.  You must see the offering of back-end products as part of the overall sale, not as some additional chore that disrupts the flow or irritates the guest.

Here’s a fundamental step for you as the dealer or manager:  set goals regarding monthly F&I product sales, their profit averages, and gross profits, and hold yourself, and your team, accountable for reaching those objectives.

So how do we make F&I a seamless part of the process?  Assuming you have already chosen a trust-worthy provider and reputable F&I products, let’s agree that you need to keep things simple, and limit the number of products to what fits comfortably into your sales process.  These normally include Vehicle Service Contracts and Gap Protection, and you may add others to the mix as you gain confidence.

As part of your selling process, you are probably mentioning the remaining factory warranty or that it has already expired.  Start planting the F&I seed early, when you are showing the car.   At that moment, just add something like this:  “and, if you decide to purchase the car, we can help you extend (or, restore) that protection, to guarantee you peace of mind down the road.”   Having ‘mirror-hangers,’ stickers, or other marketing materials (remember to check the little box on the Buyer’s Guide that says a service contract is available) will help.

They’ve decided to negotiate or purchase, so you’re now sitting with them at your desk.  The basic rule for F&I success, which applies to you as an owner-operator as much it does to the owner of a multi-store new car group, is this:  Present 100% of the products, to 100% of the guests, 100% of the time (redundant, but memorable).  Obviously, you won’t present Gap to a cash buyer, but there is a vehicle service contract (VSC) for any make or model, even unlimited miles, regardless of age, including salvage title, etc.  Fill your F&I ‘tool box’ with enough products that will meet any of those needs.  So, now you can present VSCs every time, no exceptions.  As you do, you will get very good at ‘selling’ these benefits.

F&I products are optional, unless you include a short-term ‘warranty’ with their purchase, so they must be discussed and disclosed separately.  The less-popular alternative is to do an ‘A/B’ pencil, that is, present their payment both with and without a VSC.  Either way, it’s a source of unnecessary anxiety for the dealer.  All you have to do, after disclosing the numbers they’ve already agreed to in purchasing the car, is to tell them that you just want to take a moment now to tell them what the dealership offers, to help protect them from the high cost of repairs, but that you will leave the choice to them:  it’s just something you strongly believe in for your customers.  Be enthusiastic about it, even passionate.  Selling, after all, is basically the transfer of enthusiasm. That shouldn’t be hard for you – you are in a sales profession already! Ask your provider/F&I agency to help you create a legally-compliant Menu, to help in the presentation, and use other materials, such as a brochure or placemat, to focus the customer’s attention on what you’re presenting.  If you don’t ask, you won’t get.

If they decline, carefully try to discover their true objection and address it, then negotiate terms if necessary and re-close.  If they still refuse, ask them to sign a formal waiver (just as part of the paperwork process) and mention all the benefits that they are giving up; it can help turn some of them around.You can do this!  Make these improvements today.