9 Ways to Speed Up the F&I Process

Over the past several years, dealerships have learned that speed matters in the F&I office.

The average transaction takes up to three hours, but customers only have the patience for 90 minutes, according to The Academy, a training center for retail automotive professionals. Customers have become more acquainted with an automated world in which instant one-click transactions have become the status quo. But the F&I office has lagged in its ability to integrate digital into their processing, create a structure that values performance, or leverage their expertise in relationships in order to speed up the process for customers.

Powersports Finance scouted out some key ways dealerships can leverage technology, relationships, and sales tactics to help get a customer in-and-out of the F&I office quicker, and into their new powersport vehicle sooner.

1. Get It Right the First Time

When an F&I manager initially greets the new purchaser of a vehicle, the first thing he or she should say is, “Congratulations Mr./Ms. X! I see you are purchasing Y item for Z dollars, is that correct?” said Kevin Quinn, training and development specialist for The Academy, at a MotoLease dealer training seminar in early October. The reason for the script is to make sure the customer, the purchase, and the monetary amount all match up with initial documents that the manager has. Because if something isn’t right, it cannot be simply marked out and rewritten, Quinn said. Instead, it may involve the lender reviewing and reissuing documents, which can hold up the process.

2. Start the Process Online

One of the biggest holdups in the F&I office is the amount of paperwork that is required, according to Tony Dupaquier, director of The Academy, in a presentation given at the National Automobile Dealers Association 2017 convention. But a key way to circumvent the issue is to move the process online and encourage customers to complete as much as possible before getting to the dealership. Whether this is through pre-qualification, pre-approval, or a more in-depth credit application, this can cut down on time spent in the F&I office.

3. Go Digital

In addition to moving as much as possible online, there are other aspects of digital that a dealership can integrate into its finance office. Having an electronic deal folder, especially one where sales managers can load all customer and vehicle information as well as deal structure information, can help speed up what an F&I manager needs to input, according to Dupaquier’s presentation. Digital documents can also help with compliance since the documents can easily be save, searched, or found later.

4. Meet the Customer as Soon as Possible

When a person is at a doctor’s office, it’s not the time spent with the doctor that bothers him or her, it’s the amount of time waiting for the doctor before the exam room and while in the exam room. The same logic applies for the F&I office at dealerships, or as one published report states, “Be urgent to serve, not urgent to sell!”

5. Change the Payment Structure for F&I Managers

While improving personal speed is integral, so is implementing a payment structure that will encourage peak performance. The dealership could put half of the total F&I department’s commissions earned for a given month into a pool, while the other half is paid to F&I managers directly, according to a published report. The pool should be divided among the managers by the number of deals they completed during the period. For example, if 300 vehicles were sold in a month and Manager A handled 100 of the deals, Manager B handled 50, and Manager C handled 150, then the monthly pool would be divided like this:

  • Manager A would receive 33% of the pool
  • Manager B would receive 17% of the pool
  • Manager C would receive 50% of the pool

The idea here is to encourage managers to complete more deals by tying part of their commission to the volume of transactions done and overall performance.

6. Limit Discounts and Negotiations

One of the hallmarks of any powersports or vehicle purchase is the price haggling, especially when customers see a high price on a new or used item and brace themselves for negotiating a lower price. But the adage “time is money” applies in the F&I office, according to a published report. “Dealers who have eliminated the most time from their sales processes have adopted a ‘near one-price’-type strategy,” according to the report, meaning that dealerships may still negotiate, but it’s a one-time pass. The same goes for additional products in the F&I office. And after this, focusing on market data to validate the value and price of an item is key to showing the customer he or she is receiving a fair deal.

7. Keep It Short

It’s important to explain to a customer what each document is, but there’s no need to draw out an explanation when keeping it short and simple can be just as effective without violating compliance issues, according to Dupaquier’s presentation. You can assist a customer by directly handing them a pen;, having a short, rehearsed explainer of each document; and a paperwork sequence that is followed with every customer. No need to search for items, ramble on, or jumble papers. Have it all ready to go.

8. Build a Strong Relationship With Lenders

Lenders are more than just the companies that write the checks to a customer. They are also the gatekeepers for approving a deal and can assist an F&I office dramatically in approving a deal faster. Some lenders offer various rewards programs to dealerships, and some top-tier dealerships can receive an approval within minutes because of the dealerships’ solid relationship and sales rapport with a lender which can fast-track them compared to other dealerships.

9. Use Alternative Data for Automated Underwriting

Using artificial intelligence and alternative data in underwriting can dramatically assist an F&I manager when dealing with thin-file borrowers. Thin-file borrowers are those without a robust credit history, and often include younger consumers and immigrants, Brian Landau, senior vice president of financial services and automotive business leader at TransUnion, said during a presentation at PowerSports Finance 2017 last week.

Yamaha Motor Finance Corp. USA has been using alternative data for about two years now, Lyndon Elam, vice president of retail sales, marketing, and operations at Yamaha Finance, said during a panel discussion. Out of Yamaha’s overall portfolio — which the dollar amount was not disclosed — $6 million of the captive’s portfolio is from thin-file borrowers and alternative credit data customers, he said.

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