F&I dept. - stay or go?

Adrian Stachowski

Hi Guys.

I'm a journalist, a writer for "Dealer" Magazine that comes out in Poland. I'm working on a article that covers the debate around F&I department and it's role within a dealership. I was wondering if I could ask you guys for your opinion. Is it better to have a seperate F&I specialist ot to integrate F&I process into a one-salesman scenario? What do you thing, what are the pros and cons of both ways to approach this issue? And while you give me your opinion, I would like to ask to describe your operation in that regard.

Let's have a debate!


Taylor  Politte

My opinion is that its a fallacy to think of the F/I as a one size fits all approach. I have seen many different F/I settups that work for different dealers and their customers.  Why would there have to be one uniform approach?  Does Dale's Dodge have to do it the same way as Dan's Dodge?  Or because it works better for Dan's Dodge does that mean it will work just as good for Dale's Dodge? How about we let Dale and Dan figure out what works best for Dale and Dan. 

Joe Tareen

You ask a very relevant questions as it pertains to the future of automotive retailing. I believe what dealers and OEMs think here is irrelevant. The consumer is already driving the marketplace towards consolidating this department or at least placing it in front of the entire sales transaction. Capital One has a web platform that allows customers to shop for cars and deals based on their pre-approved loan amount. As more players enter this market, we will see these forces coupled with consumers' wish to expedite the entire process will eventually reduce the relevance of the F&I department as a revenue channel for dealerships. A smart dealer will recognize this today and fine tune their technology and process to prepare themselves for this shift. The future of automotive retailing for dealerships is really going to be about volume and speed of transaction. Not slowing down the process to extract more gross profits per transaction.

Megan Barto

Of course it's more beneficial to have a separate F & I department (& I don't just say that because I'm an F & I Director -- I mean I do buuuutttt read on).  F & I isn't just about "selling products" is also about compliance, lending, paperwork, etc.  Do you really want your sales people to be responsible for EVERYTHING? The desk managers have enough to worry about with recalls, ordering, shop bills, dealer trades, not to mention the customers.


Who would it benefit to get rid of the F & I Department?

Steve Stauning

"Who would it benefit to get rid of the F & I Department?"

Answer: The Customer. (And, perhaps, the dealership.) 

While there are certainly great F&I Departments out there, the vast majority that I've worked with are staffed with Prima Donnas who take pride in torturing the sales team, making customers wait for zero reason, dodging cash deals and going through the motions with Menu presentations when they feel like it.

Dealers like Schomp BMW have had end-to-end sales specialists handling everything (no need for desk managers, either) for a decade. Oh, and they enjoy great back-end grosses and terrific CSI.

Certainly not the answer for everyone, but definitely the direction the market is headed as grosses continued to get squeezed. 


In response to Steve Stauning's comment...

Here's a short list of benefits a customer gets from working with a knowledgeable and ethical F&I manager:

> A vehicle - customers with shaky credit often need F&I assistance in simply getting their loan "bought"

> Lower rates - More often than not, it's in the F&I manager's best interest to provide the customer with the best rate available considering the fact that if the customer refinances the F&I salesperson may lose all the revenue provided from the bank of credit union for the loan origination.  A good F&I manager can negotiate with lending institutions for the best rates.

> Best fit aftermarket product options. - Ex. Gap insurance when appropriate, extended service contracts that actually cover what their vehicle has.

> Assistance with cancelling service and gap contracts in the event the customer sells or trades their vehicle

> Accurate/Compliant paperwork -  The F&I double checks odometer readings, title registrations, mailing addresses, taxes, etc.

> Timely paperwork processing - trade payoff's, etc.

The fact that Steve states that the "Vast majority" are Prima Donnas who like to torture the sales dept, and make customer wait for no reason tells me you might be associating with all the wrong dealerships. 

Why would a finance manager torment their sales staff...the source of their income? Why would they make customers wait for no reason? Those would be illogical acts of pure self sabotage.

If you haven't spent time behind the F&I desk you might not be qualified to make determinations on the value the F&I brings to customers or the dealership. 

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