As more dealerships adopt a one-person, no-haggle sales strategy and ditch the finance and insurance office, F&I training expands across the store. And the ethics training is also simplified.
The transparency of a one-person, one-price approach lends itself to a more ethical culture, said some dealers who have made the switch.
Mark Rikess, CEO of Rikess Group, has more than 50 dealership clients that practice the one-price sales approach. He said that with such stores, the markup of the dealer's buy rate to the lender is set and grouped by credit tier, meaning customers in an A Level credit range may pay half a percentage point over the buy rate, B Level one point more, etc.F&I products also are sold via a menu at the same prices to each customer.
"It really eliminates the opportunity to take advantage of certain types of customers," he said.
Team leaders and document processors typically handle the paperwork, and compliance and training across the store increases because the dealership has to train sales staff on selling F&I products, Rikess said.
Checkered Flag Motor Car Co. in Virgina Beach, Va., has seven dealerships and 10 franchises in southeast Virginia. It shifted to a one-price strategy four years ago for all used-vehicle sales and for new-vehicle sales at its mass-market brand stores. The sales process for new-vehicle sales at its luxury brand stores, for now, follows the traditional negotiation model.
In January, all of Checkered Flag's stores converted to a single point of contact for sales.
The group learned that without traditional F&I departments, it had a training gap, said Pete Lively, its vice president of variable operations. It sent sales managers who didn't have a financial services background to a one-week training with JM&A Group to learn techniques and become certified in F&I legal and ethical standards, Lively said. It also aims to have its sales staff who carry more responsibility to complete training after they pass a core competency, he said.
Most of the group's sales staff has been hired from outside the auto industry, which coupled with technology has helped with F&I ethics, Lively said. The stores use Darwin Automotive to present F&I items on iPads, which makes the process easy and transparent, he said.
"They've never tasted the dark side. They don't know how to be unethical because it's all managed software and everything is locked in," he said of new employees. "They don't have the ability to go change the price of a vehicle service contract. They don't have the ability to add three points of rate. None of that is within their control."