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As we approach the second decade of what was so recently called “the new millennium,” one can look back to such historical landmarks as the Cultural Revolution and Industrial Revolution and rightfully add the recent Technological Revolution to that list.

Since the introduction of computers (actually ‘programmed calculators’) to F&I business offices back in 1978, followed by the first CPU in 1980, things have certainly progressed. Back then, business managers were reduced to actually filling out forms by hand... all of the five we had to deal with. There were bank contracts, the bill of sale and one or two others required when ‘Adds’ were sold.

Please understand, this step was required even when these computers were in use as the programs weren’t sophisticated enough to take the form-filling pain away. Then came the next generation when the document printing part was included and lo-and-behold the F&I office entered the modern world.

When the insurance providers were creating things got really nice. These programs were easy to navigate through: there were fields to place your products, changes were easy to make and deal-manipulation was a breeze.

Things have changed

Thanks to the need to create software programs to aid overall dealership administration the dedicated F&I software is now hard to find, if not gone altogether.

Certainly there are programs designed to create ‘deals’, calculate and store figures and print forms but the ease needed to make money has disappeared. I know many offices are generating excellent profits with the programs they have but that doesn’t excuse the fact that the tools needed to maximize profits quickly and easily are not available.  

I am disappointed that the very companies we depend on to provide us with advanced technology are, from all appearances, short-changing us where we need it most… efficiency.

There are software programs written to create deals that won’t talk to other ones that become bank contracts. There are suppliers whose software requires client information to be entered in their fields even though it has been entered twice before to accommodate other applications.

Of course, if this isn’t enough to throw you off balance, there is the balancing issue that is required because existing deal-creation software doesn’t always jive with financing software until you do some serious number-juggling.

Then, if you decide to change some terms mid-way, add some insurance, delete some insurance, change a few other odds and ends, you have to go through the balancing thing again and yikes… it’s enough to make Einstein go back to counting on his fingers.

Meanwhile the customer is there… and the business manager is swimming.

Experiences may differ

OK, some readers may not be identifying with this and I understand why. You see, this is where selling styles may make the difference. I like to play. I am not a step-seller. I am not afraid to ‘load the deal’, quote a client a payment that is $150 per month more than s/he was quoted on the floor and attempt to get it (and yes… I AM doing it today).

The fact that one system is not permitted to communicate with another is ludicrous in this day and age. I understand the proprietary issue but to be perfectly frank, we’re talking numbers and client names here – not some secret scientific code designed to launch rockets!

I am upset! These companies charge dealers a lot of money for software that I believe is sub-standard when it comes to F&I applications. It may be great to store inventory, do bookkeeping and other administrative duties… but the Business Office is a money-making department and it needs the best tools available to assist its F&I practitioners. They need to be able to dance through changes quickly rather than face obstacles that will inevitably discourage creative, persistent and go-back-for-another-try selling strategies.

Furthermore some of these programs put limitations on the number of products the office can offer for sale, once again costing dealers profit they so badly need in this day and age.

I know changes are coming with regard to some specific applications but I still won’t be satisfied until all deal-creation software programs communicate with the banks in a way that is simple, fast and profit-enhancing, eliminating the need to ‘balance’ the figures at the worst possible time – that is, when dealing with customers.

End of rant!

So what else is new?

I am happy to report the introduction of the SAL Group’s Balance Shortfall Protection (Insurance) program known as Companion Clear. (SAL is a division of Industrial Alliance Pacific.) The product is excellent and, quite frankly, easy to sell. Very similar to the popular Walkaway Insurance, sold in some parts of Canada, the Balance Shortfall Program protects borrowers against payment problems due to sickness, accident, loss of life, critical illnesses (which is a different category of sickness) and finally loss of employment. All wrapped up in one tidy package, this $800 retail item will make selling insurance one of your favourite parts of the day. It will make payments for the claimant if they fall prey to any of the listed perils or, should the client prefer, they can drop the vehicle off, clearing the debt while maintaining their pristine credit rating.

It’s a great plan but don’t forget to sell the full coverage plans as well. Many of your clients will need both.

The importance of selling what’s important

F&I is as important today as it ever was. Clients are financing high dollar amounts on vehicles that cost more than any other time in history. The need for personal and mechanical protection is paramount both for client retention and satisfaction.

The vehicle is the fun part of the equation; of this there is little doubt. But the fun can be diminished when health issues prevent the driver from paying for the toy they purchased. If a mechanical or electrical failure occurs months or years down the road, the rude awakening that accompanies a hefty repair bill can make anyone’s eyes water.

When retail leasing was first introduced in the mid eighties, payment quotations by sales people became the popular modus operandi. Prices were climbing so selling a lower payment made things easier.

The problem was and still is… it handcuffs the ability of the F&I office to maximize sales of important protection items.

When payments are quoted, they are usually for the biggest and best car the monthly dollar can buy. But once all available money is accounted for, getting a buyer to cough up another $100 per month for options they really, really need – like insurance – tougher to do.

Why don’t we consider loan protection as an important vehicle option? Why don’t we believe that long-term mechanical/electrical breakdown coverage is more important than a sunroof option?

Don’t Loan Protection and MBI’s prevent problems and keep people out of trouble?

If one is to think of this in purely financial terms, the extra profit earned from up-selling vehicle options will hardly pay the store’s light bill. Permitting a free path to up-sell F&I products will not only protect our valued clients but increase profits exponentially.

It’s time to get back to basics in regards to selling the vehicle and assisting the F&I office. Leave payment quotation to the Business Office. Get your sales people to get the commitment from the customer to purchase if the payment is comfortable.

This way, all the numbers will be provided to customers before they make a final decision. No one will be quoting numbers and rates prematurely and errors and misunderstandings will be eliminated.

And yes… you’ll even make more money.

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