Best Kept Secrets of a Profitable F&I Department

Craig Waikem
Our salesman get the same percentage of front end gross on back end gross. Salesman have more incentive to make sure we capture finance (rather than local credit union or cash deal), and they can begin to soft sell some of the products before finance. Not sure how common this is, but with the front end profits on new vehicles on the decline, we all need to capture finance!
Steve Devereaux
Hi Craig. Thanks for the input. How long have you been doing that? Did you see an improvement when you started doing that?
Craig Waikem
Steve, we have been doing it for over 10 years. It wasn't fair to watch a salesman work a customer over 4-5 visits, take a mini, then watch the finance manager and sales manager celebrate with a big back end deal. We reduced their front end commission % considerably, and the commission on the front and back end is the same %. Works really well, creates a team atmosphere from sales to finance, and should also increase your finance penetration and your finance product penetration.
Tim Nester
Steve, I have seen an increase in desire for sales involvement and appreciation for the products and services that are offered in F&I with changing payplans and good training on benefits. I have mixed feelings on Dealership branding of the products. As far as payplans are considered, I have had success with adding a percentage of gross profit on backend much like Craig stated. I have not reduced front end percentages when doing this but depending on the percentage that is currently in the payplan it may be a topic of review. First and foremost is getting them trained on what the benifits are and knowing what the word tracks are to set up finance effectively. And even more importantly, when to leave the expertise to the product experts. Salespeople will inherently say too much and dig a hole if not cautioned about killing the efforts of finance. Training Training Training.... But good Training. Tim
Steve Devereaux
Thanks a lot guys... I see what you are saying... Good training! What about the brand of the service contract & products? Anyone out there that does $900 + per copy on used? I want to know how you got there specifically. What brand contract did you use? Who trained you? Who got trained? How was everyone compensated. Please help!> Thanks :)
Tim Nester
Steve, To answer your questions in line: 1) I always used the branding of the service contract provider ( The Warranty Group " Q-certified" and Continental Warranties "Gold Coverage") 2) In my experience, used per copy was always $1,100 - $1,300. - my revenue was more product saturation than rate mark-up. - VSC, Gap, Tire & wheel, roadside asst. When with The Warranty Group - I went through there 2 week training in Chicago. I then did in-house training for the sales reps. 3) Sales force was compensated with a 7% of gross prifit on backend in addition to there 20-25% front end. I hope this helps Tim

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