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Bryant Gibby

Bryant Gibby Used car manager

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Finance penetrations

Like everyone knows, the finance department is arguably the most important department of the dealership. Dealerships are relying more and more for strong #'s from their finance department in order to be successful. With that said, the GM has asked me to spend time with our 2 finance managers and evaluate the entire department. I am going to review their #'s over the last 12 months and find areas where we can improve the department both in overall gross and product penetration. I'm happy to spend as much time as is needed with them due to the fact that I get paid on the overall gross generated from the sales department. If they do better, I do better.

 

     Here's what we expect out of them:

  1. Warranty penetration: 55% with $1000 in markup
  2. Gap penetration: 30% with $400 in markup
  3. Credit life penetration: 12% with approx $150 in markup
  4. Chemical penetration: 25% with $200 in markup
  5. Etch penetration: 85% with $261 in markup
  6. Finance penetration: 75% with approx $350 reserve

 

In total, the goal is $1500 per car. That is new and used combined.

Lately, our finance reserves have been significantly higher than the $350 that we expect out of them. They are still averaging around $1500 per car but the majority of their other penetrations have been below the required penetration levels.

I was just wondering what other stores require out of their finance managers. Are the percentages that we forecast for attainable in today's market? Is the amount of margin attainable? Let me know what you guys think so I can determine if we need to make some adjustments.

William Bryant
It sounds like your F&I Dept is doing amazing! I've found different makes/areas do differently for example I never saw a 75% finance penetration. We lied, cheated, and stole to get a 45% finance penetration (but still had very high per copy averages). If you're doing that high of finance penetrations I would expect the GAP penetration to be much higher. But very respectable numbers indeed

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