ACV facts & figures
A dealership’s Finance & Insurance (F&I) manager is a finance professional responsible for securing financing for new and used car buyers, ensuring compliance with laws and regulations, and offering a range of insurance and warranty products. They work with customers to explain the legal and financial aspects of the car purchase and negotiate terms with lenders. They also offer protection plans, such as extended warranties and gap insurance, to help meet lender requirements and mitigate the financial risks associated with car ownership. This is a vital role for any dealership. Here’s what you need to know if you already work for a car dealer and are considering moving into this position.
How the F&I Department Supports a Dealership
F&I managers are responsible for upselling additional products and services to customers, including warranties, insurance policies, and maintenance plans. While car sales generate revenue, F&I sales can be even more profitable for new and used car dealerships.
Some of the most popular products and services F&I managers offer customers include extended warranties and guaranteed asset protection (gap) insurance, which the customer's lienholder may require. F&I managers may also offer credit insurance, which covers car payments in case of job loss or disability, and maintenance plans to help cover routine maintenance costs.
F&I managers are also responsible for educating customers about these products and services. They work closely with customers to determine their unique needs and recommend the best options. They also explain products' legal and financial aspects and ensure that customers understand what they are buying.
The F&I Sales Process
The F&I sales process is a structured approach to selling finance and insurance products. The process involves several steps, including product presentation, needs analysis (i.e., listening to customers), product recommendations, and closing the sale. F&I managers must be skilled communicators and negotiators with experience in the face-to-face sale of high-value products.
Compliance and regulation are also critical aspects of the F&I sales process. F&I managers must ensure that all products and services are offered in compliance with state and federal regulations. Failure to comply with these regulations can result in significant fines and legal action.
The financial and insurance (F&I) manager must assess the buyer's financial situation to confirm they're able to service the loan and purchase the vehicle. They will usually need to assess:
- The overall level of debt shown on the applicant's credit report.
- The applicant's income-to-debt ratio.
- Details of the purchaser's past auto loans, including the lender’s name, loan amount, and on-time payment records.
- Any negative credit remarks or late payments associated with the lenders utilized by the dealership.
- Employment details, including the amount of time in their current role and status.
Skills and Qualifications of an F&I Manager
To be an effective F&I manager, one must possess strong communication and sales skills. They must effectively communicate complex financial and legal information to customers and negotiate with lenders. F&I managers must also be detail-oriented and organized, as they are responsible for managing large amounts of financial and legal paperwork.
Typically, F&I Managers start their career in other dealership positions, like sales, to learn the business before transitioning to F&I. Ongoing training and education are also essential for F&I managers. The auto industry constantly changes, and F&I managers must stay current on the latest regulations, products, and technologies. The auto industry constantly changes, and F&I managers must stay up to date on the latest regulations, products, and technologies.
The Future of F&I Management
As the auto industry evolves, the role of F&I managers is also changing. With the rise of electric vehicles and online car shopping, F&I managers must adapt to new technologies and customer preferences. For example, in a recent study, 74% of shoppers wanted to complete financing online before visiting the dealership.
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1. Liatsis, Bill. "THE NEXT-GEN AUTOMOTIVE F&I EXPERIENCE HAS ARRIVED." Dealer Inspire, 21 Feb. 2023, www.dealerinspire.com/online-automotive-finance-solution/.
2. “F&I Manager - Everything You Need to Know.” Finance Manager Training, financemanagertraining.com/fi-manager/.
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