Just when everything seemed to be going along fine, the economy imploded. And when it did, some of the first casualties were lenders who decided they didn’t want to stick around when the going got tough.

The auto industry was spared for a while until its lenders realized this wasn’t going to be as much fun for them as it had been and several headed for the hills. It hasn’t ended there either as many of the manufacturers’ programs, including leasing, are fading away as well.

I haven’t seen their books so I can’t say what prompted the lenders’ departures; I can say I am not happy about them. I can say that while the ‘Tree of Plenty’ was there to be plucked, the lineup to do so was never-ending. A few bad months and some dire forecasts and the very organizations designed to keep money rolling picked up their balls and left the game.

There are still those willing to be there and help and for that each and every dealer should be grateful. Yes, restrictions have tightened up. Yes, those who left may have been able to do the same thing without deserting the ship. So to those who have remained thank-you.

It was different ‘back then’
Those whose hair is greying and who may still have a pair of seersucker pants in their closets will remember tough financial times from the past. I remember quoting interest rates in the low 20s when the only rate chart we had was a sheet of paper and a CIBC logo on its top.

People bought and they bought with little to no reservation. Why? The major difference between those days and the present is this... back then, rate wasn’t an issue. It simply was what it was.

That’s right; back then we didn’t sell using the ‘rate crutch’. Vehicles were sold on the basis of price and quality, allowing only the most experienced and qualified to work out the final dollars. Back then sales people did what they did best; they sold the vehicles. Negotiations were left to those who did that part best.

Our business has become so wrapped up in selling its wares by telling people how cheap they can be that some may have forgotten how to sell the excitement. While it is a generalization at its best, one must admit, when it comes to product offerings we do concentrate a bit too much on monthly payments and low interest rates.

Sell the vehicle
The point of all this is simple. Let’s get away from stressing the weak point of the sale. Let’s start selling the vehicle on its own merits while allowing the experts - your F&I departments - to quote payments and rates.

I have been on this soapbox for many years simply because I don’t understand the logic behind the strategies presently used to sell vehicles and subsequently the higher profit items, Finance and Insurance. I don’t understand why we promote the idea of maximizing a vehicle’s options to meet the payment limits quoted by clients when the final gross is hardly if at all affected.

I don’t understand why we continuously create obstacles designed to make it tougher to earn F&I revenues rather than pave the way for them.

Somewhere along the way the control to provide payments was taken from those best suited to do so and given to those who, in my opinion anyway, would best be served by not doing so.

Time for a change
Only when money tightens up and approvals become harder to obtain do we start looking at the cracks in the cement. This is one of those times. The suggestion is a simple one. Your F&I Department is designed to hunt down and locate lenders willing to ‘fund deals’. They need some latitude here.

Whether or not a vehicle is equipped with heated seats or some other exotic option designed to meet a client’s financial ability should no longer be a primary objective. Your F&I office should become the starting point in the discovery of which vehicle is best suited to meet the client’s financial ability. Armed with the right tools, they can best ascertain which vehicles will fall within a desired payment range. It is they who can elevate the profits and fall within a lender’s comfort zone while simultaneously protecting the client against financial peril.

Regardless of the fact that this practice should never have been discarded in the first place, there is no better time than the present to reinstate what not only worked so well for years, but will be today the key (for some anyway) to survival.

If you’re uncertain about how to accomplish this, feel free to contact me. I will be happy to go over a workable, logical and most importantly effective profit-enhancing marketing plan.

To quote the new U.S. President... "it’s time for change."

Harvey Cohen is the author of four books and principal of Harvey Cohen Learning Systems, Inc., a Canadian company dedicated to automotive F&I and sales training and support. You can email Harvey at learntosell@ harveycohen.com.

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