At the conference Garcia offered a new take on six F&I maxims.
1. One size fits all
The conventional wisdom: You can always go down, but you can never go up. So start with the most expensive options first then negotiate downward.
Garcia's take: "Big mistake. The thinking is you show everybody a 7-year/120,000-mile service contract because you can always go down. It's a terrible idea. Why show it to somebody who already told you they're only keeping their car for five years? You're creating an objection before there even is one. ... The first thing the customer is going to say is: 'That's more coverage than I need.'"
2. Show only the negotiated loan term
The conventional wisdom: Stick to the loan term the sales department has negotiated especially if the term is in the longer range to achieve the lowest possible monthly payment. Don't show customers shorter, more expensive alternatives.
Garcia's take: "If the [sales] desk quotes a 72-month term, the F&I manager only shows 72 months. Why show 60 months? I do it because the customer looks and says, 'Look how high that 60-month is. I could never afford that.' Now they're thinking you didn't sell them the most expensive possible option. It builds some trust."
3. Pitch every product
The conventional wisdom: F&I managers can't afford to miss any potential sale. And customers could complain later that they were never offered an extended service contract if, for example, they have a big repair bill. So F&I managers must make a complete presentation for every single product.
Garcia's take: "If the menu presentation lasts 30 minutes, they're going to go to bed. That is way too long. The customer looks at that list and they're already coming up with all those reasons why they're going to tell you no. Make the assumption they know what you're describing because, guess what, they do. For most people this isn't their first rodeo. In their lifetime, the average person buys something like 14 cars. They know what a service contract is. They know what tire-and-wheel is. You may need to remind them what the benefits are.
4. The longer the better
The conventional wisdom: Don't let customers out of the F&I office until they buy something.
Garcia's take: "The perception is the guys who are really good at menu-selling keep the customer in there for an hour. It's an old-fashioned grind session, a marathon session. If it works, it's not because the F&I manager is such a good salesman, it's just because we wore them out. That's not such a good salesman."
5. The first person to speak loses
The conventional wisdom: Speaking first is a sign of weakness when negotiating. Better to make the other party speak first, even if it means long, awkward silences.
Garcia's take: "You have to have an introduction. You have to bring down that wall. Until I tell them three things, they're not listening. So I tell them three things right up front. I answer their three questions: What's my term? What's my rate? What's my payment? I started just giving it to them."
6. Menus sell products
The conventional wisdom: Selling from a menu organizes the product presentations and helps make sure none gets skipped. That's what's needed to help sales.
Garcia's take: "Menus don't sell F&I products; F&I managers do. You'd be better off with a good F&I manager with a piece of paper. You're not going to take a poorly trained F&I manager with a good menu and get them to sell $1,500 worth of F&I per unit."