Multi-line powersports dealers might start replacing finance managers with F&I brokers, particularly as manufacturers continue to launch retail finance programs and revolving credit partnerships, said Bruce Marcia, director of retail management consulting firm Bruce Marcia & Associates.
“There’s been a lot of manufacturers that are getting into finance themselves, which becomes very frustrating for dealers — especially multi-line dealers — to have to remember all the programs going on,” Marcia told Powersports Finance.
Additionally, the experienced and successful finance managers will “gravitate” toward working in the auto or RV industry, he said. “Powersports dealers have a really difficult time attracting and keeping good, solid F&I managers,” he said. “In the auto industry, there are a lot of people that sell cars on a regular basis, so they can make a really good income. RV and marine dealers are financing very large ticket items, so F&I people love to work there because they can make a lot of money. In the powersports industry, not so much.”
Small or medium-sized dealers, in particular, should look at the possibility of pairing up with a F&I broker, Marcia said. “It costs more money to use a broker, but on the other hand, when you have an F&I manager who is not solid — there are a lot of costs associated with that,” he added. For example, paid vacation time and employee training, and — on top of that — there is not a lot of strong F&I training available.
The F&I manager will always take the path of least resistance, because they just don’t have a choice, said Chris Clovis, dealer principle of Freedom EuroCycle Las Vegas and BMW Motorcycles of Las Vegas. “They are trying to get the loans done as quickly and as efficiently as possible.”
When manufacturers launch new retail finance programs, they are the opposite of the path of least resistance, Clovis told Powersports Finance. “Because now you have to figure out what the program is, what they will buy, what they won’t buy, how deep they will buy, the credit profiles they will accept, what they won’t accept. You have to know all of this stuff.”
The F&I staff has to spend a bunch of time and energy learning the program and attempting to get consumers financed, Clovis said, all along knowing that the captive or lender will not approve 80% of those customers — which can make the dealers feel like they are “wasting their time.”
While Lufkin, Texas-based Ross Motorsports may not struggle to learn all its lender partners’ different programs and promotions, the sales staff does spend a lot of time meeting with reps, to become informed, General Manager Ryan Williams told Powersports Finance.
“Normally our lender partners will come out with their different promotions at the first of the month,” Williams said. “What myself, the owner, and sales manager do is we sit down on the first day of month and we go over — for at least an hour — every single promotion, not only what the powersport manufacturers have going on but also the lenders.”
Investing in an F&I broker is something that needs to be considered for the future, Marcia added. “It would be different for a larger dealership, but I think it’s convenient for smaller dealerships. They really need to consider a broker,” he said, because it’s not easy to juggle three to five different finance programs without defined dealer training.