Old repair bill is a powerful tool for F&I team

LeAnna Cowan says a disciplined sales process and other best practices enable her and her F&I team to sell three products per vehicle, on average.

Published in Automotive News March 10, 2014

When the air conditioning compressor in LeAnna Cowan's car failed in the Las Vegas heat, the $1,250 repair bill wasn't a hardship. Cowan, the finance director at Team Ford-Lincoln, had a service contract that covered the bill.

That broken compressor bill is still paying dividends years later. It's one tool that Cowan and her staff at the Las Vegas dealership use to sell an impressive amount of product in the F&I office. Team Ford-Lincoln is a top seller of Ford Motor Credit's extended service plans and prepaid maintenance packages.

When the dealership's F&I managers show car buyers Cowan's bill, it creates the perfect opportunity to point out that all the finance staffers at Team Ford-Lincoln have bought the same coverage for their own vehicles.

That's not a mandate of employment. They have all seen the coverage pay off for colleagues and customers. That universal buy-in sends a powerful message to anyone wondering whether the plans are worth the cost.

"It's huge. You just can't fake that kind of commitment," Cowan said. "It's something you have to believe in to sell."

And Team Ford-Lincoln sells: on average, three products per vehicle. In 2013 the dealership sold service contracts or prepaid maintenance on 93 percent of the new vehicles it retailed, compared with an average of 62 percent for the store's 20 group, Cowan said.

For service contracts alone, the store's penetration rate is 70 percent on new-vehicle sales, she said. Nationwide, the rate was 42 percent in 2012, National Automobile Dealers Association data show.

Team Ford-Lincoln declined to reveal its F&I revenue per vehicle retailed, but Cowan said the dealership's number is growing and falls between its 20 group's 2013 average of $1,284 and the group's high of $1,674. Dealer reserve isn't a big part of that, she said. Most of it comes from product sales.

Cowan credits her department's success to several practices:

• A disciplined sales process. Team Ford-Lincoln's four F&I managers, plus Cowan, visit each customer in the showroom for a two-minute interview after a deal is logged in. They ask a basic set of questions: Has the customer purchased service contracts in the past? How many miles a year do they typically drive? Those and others help the staffers determine which products the customer might be inclined to purchase.

Once the customer is in the F&I office, the manager goes through a paper menu with four choices of product packages. Each customer is offered every product, no exceptions. That compliance measure also reaps additional sales a manager might not think likely, based just on the interview.

• Limited product offerings. It's important to sell only products you believe in and would buy yourself, Cowan said. Team Ford-Lincoln offers seven products: service contracts; prepaid maintenance; guaranteed asset protection, or GAP; LoJack; and tire, windshield and dent protection. The last three typically are offered as a bundle but can be separated if a customer wishes.

"We don't like a ton of products," Cowan said. "We wanted really good solid products, and we didn't want the customer to be overwhelmed."

For instance, the dealership used to sell credit life and disability but dropped it after it became a "headache," she said. Some customers had trouble getting disability claims covered and blamed the dealership.

• Shared best practices for overcoming objections. Much as Cowan's repair bill helps sell service contracts, the dealership's F&I managers use a special worksheet to sell customers on prepaid maintenance. It estimates the cost of Ford Motor Co.'s recommended maintenance schedule and compares that to the lower cost of the maintenance contract.

If customers say they can get oil changes or other basic jobs done cheaper or faster at Jiffy Lube, the F&I managers stress that it's better to have the work performed by certified technicians using original-equipment parts. They also point out the convenience of using the dealership's eight-bay Quick Lane across the street.

If car buyers suggest they might buy a service contract later, F&I managers stress that they can lock in today's rate and roll it into the car loan if they buy it upfront. That's especially compelling to those getting a 0 percent finance deal through Ford Credit, Cowan said. Managers also note that the Ford service plan is transferable and can be canceled for a prorated refund.

• Loyalty to Ford Credit. Team Ford-Lincoln sends up to 80 percent of its deals to Ford Credit. It benefits both customers, who get great incentives such as subvented rates, and the dealership, Cowan said.

"Because we send them so much business, they buy some incredible crazy paper from us," she said. Ford Credit also provides monthly training to the F&I staff.

• Promoting from within. Cowan's experience guides her personnel policies. The Ohio native entered the industry as a $4-an-hour rental car clerk at a Ford store in Lansing, Mich. She worked her way up to the finance department before moving to San Diego and working in a couple of dealerships there.

When her now-husband proposed a move to Las Vegas, where he had family, Cowan looked for a job there. In 1992 she joined the F&I staff at Friendly Ford, owned by Ed Olliges. In 2000, when Ford awarded a new point in Las Vegas to Steve Olliges, Ed's son, Steve asked Cowan, then assistant director, to run the new store's F&I department.

Fourteen years later, every one of Cowan's F&I managers has been promoted from a sales manager position.

When you promote from within, "you have everyone in the dealership saying, 'I can strive for something,'" Cowan said. "It's just really good morale for the whole dealership. And you know what you're getting personalitywise."

Her F&I managers have been at the dealership for nine, eight, five and two years. Cowan credits her bosses, Olliges and General Manager Al McDonald, for providing stable leadership and steady training that keep turnover low.

That longevity of staff has been a key to the dealership's strong results, she said: "You're not putting all that training in on people who are going to turn around and leave."

F&I powerhouse
Dealership: Team Ford-Lincoln

Where: Las Vegas

Finance director: LeAnna Cowan

2013 service contract penetration: 70%

Keys to success:

• Disciplined sales process

• Limited product offerings

• Promoting from within

You can reach Amy Wilson at awilson@crain.com -- Follow Amy on Twitter: @theamywilson

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