Where is the greatest opportunity to improve your dealership’s F&I operations?
Asked that question, Mary Byrne, a one-time retired dealer who now is general manager of Bruce Titus Automotive Group, didn’t hesitate.
“It’s speed,” she said. “How do we bridge that gap between when the customer says yes, we get them into the [F&I] office and get them out?”
Bruce Titus Automotive operates six franchises under four rooftops around Olympia, Wash.
Other dealers, interviewed on the sidelines of a May conference for credit unions hosted by CU Direct, agreed: Speed matters.
“Our No. 1 concern is trying to change and improve the consumer’s experience,” said Andy Crews, CEO of AutoFair. And to do that, he said, “It’s all about transaction times.”
AutoFair, of Manchester, N.H., runs eight new-vehicle dealerships and two collision centers in New Hampshire and Massachusetts.
Studies consistently show that a dealership’s customer-satisfaction scores are tied closely to how long a customer has to spend in the dealership -- with scores plummeting if it takes more than an hour and a half to drive off in a vehicle. A large chunk of that time is spent in the F&I office.
“I’ve never seen the focus on transaction times, the sensitivity” to the issue that he sees now, Crews said. “We’re all asking for it.”
That focus is putting pressure on F&I managers and lenders. It’s causing dealerships to review their online strategies and could even spill into state legislatures.
Finding the right speed isn’t easy.
“It’s something we constantly work on: finding that balance between time consumption and customer satisfaction,” said Bill Paschen, vice president of finance for Tuttle-Click Automotive Group. He oversees 45 finance managers at 17 dealerships in Arizona and Southern California.
“If you go too fast, you end up leaving money on the table. If you go too slow, you might lose a customer because they’re going to remember that experience as a painful one,” Paschen said. “So we’re developing continually our presentation with our customer and how long it takes. We monitor it.”
Paschen’s expectation? “Forty-five minutes to an hour,” from the time the F&I manager gets the deal jacket to when the customer leaves the F&I office, fully processed.
“As long as you keep the customer entertained and engaged, an hour doesn’t feel like an hour. It seems like 15 to 20 minutes,” he said.
The first step, Paschen said, is making sure the F&I manager knows how, using a menu, to be fully compliant with all regulations. Otherwise, mistakes mean the deals come back for rework and the F&I manager falls behind, making it difficult to focus on the customer on the other side of the desk.
But if the F&I manager has everything in order, Paschen said, “You can genuinely have an entertaining time with the customer. You can communicate with them, get to know them, and build the trust factor, which ultimately helps everybody because they’re going to buy the products that protect them, and the dealer can retain some profit.”
Of course, the F&I manager trying to move more quickly is dependent on lenders’ response times. Paschen said he expects lenders to get back to a dealership, even if only to confirm that they’re working on the deal, within five minutes.
That may seem “unreasonable,” he said, but typically the customer is sitting at the dealership and “five minutes to a customer is a very long time. It feels like half an hour.”
He cuts credit unions a little more slack: 10 to 15 minutes. That’s because while banks probably rely on impersonal software to make a lending decision, smaller credit unions may know that customer’s history and may be more understanding if a one-time event hurt that individual’s credit score.
Crews said that “anything a lender can do to speed up that process,” including e-contracting, is something they should be working on.
Crews said lenders and dealers could benefit from joining to urge state legislatures to make the move to digital documents a higher priority than it has been.
In the meantime, dealerships should explore ways to help customers begin the F&I process online, much as the dealership’s website helps them to start their shopping online, he said. “If the customer started the [F&I] process online, we can get the transaction time down to 45 minutes,” Crews said. “If they walk in cold, it’ll be two hours.”