The dealership finance manager is one of the most complicated and highest-paid positions in automotive retail. Though a six-figure salary awaits a top F&I manager, so does the pressure to make up for shrinking front-end profit margins and the burden of maintaining compliance standards.
As new-vehicle margins melt away, structuring a pay plan that rewards one of the biggest earners in a dealership but still ensures the job is done ethically and legally is one of dealers' greatest challenges, auto retail experts said.
A traditional F&I pay plan is commission-based. F&I managers' pay is largely based on product sales and finance reserve — the retail margin dealerships earn for arranging a loan. In 2016, F&I managers made $138,209 on average nationally, while 14 percent made more than $200,000, according to the National Automobile Dealers Association's 2017 Dealership Workforce Study. That compares with an average salary of $130,342 for sales managers and $115,082 for parts managers.
But a question of ethics doesn't arise because of the amount of money F&I managers make, said Jim Ganther, CEO of Mosaic Compliance Services. It's about how they earn it.
"Your pay plan is your job description, and if your pay plan in F&I is based on the sale of F&I products, your job description is, sell F&I products," Ganther said. "That sounds reasonable, except, what if the customer doesn't need all those, or what if the customer doesn't know that she even bought them?"
He recommends incorporating spot-checking into every F&I pay plan. Any errors in an F&I manager's deal jacket would impact his or her pay. "They're being paid to sell product. They're not being paid for baseline compliance because there's no money in a clean file," Ganther said.