F&I classroom is back to the basics

"If they buy the payment, they'll buy what's in the payment."

For Marv Eleazar, finance and insurance manager at Langdale Ford Co. in Valdosta, Ga., the sour note produced by this advice, often passed along in F&I training schools decades ago, still rings in his ear.

It refers to payment packing, a practice whereby an F&I manager would pad a customer's monthly payment quote by adding F&I products without the customer's knowledge. It's the kind of advice once regularly taught in F&I training, which came into popularity in the 1960s with the creation of the F&I office.

After decades of increasing regulatory oversight of the F&I office, as well as the rise of Internet-driven pricing and product transparency, times have changed.

Payment packing has long been considered deceptive and unfair. Consumer protection laws mean it's also illegal now. Today, says Eleazar, "I don't think any trainer in their right mind would say something so stupid, or even infer it."

In the early days, F&I training programs varied considerably. Some would strive to show F&I managers how to do business the right way, while others would disclose the loopholes managers could exploit to their advantage.

In the past two decades, regulations aimed at curbing bad practices, technological advancements inside and outside the dealership, and the vehicles themselves have substantially altered processes in the F&I office. As a result of these changes, customers entering the F&I office today expect a fast, smooth, transparent and personalized process. And F&I training companies have pivoted to meet those expectations.

The modern F&I curriculum focuses more on social and emotional intelligence and building value in F&I products, industry insiders say. Motivational malarkey and shady sales tactics are no longer a part of F&I training.

When Steve Roennau, vice president of compliance at EFG Cos., of Irving, Texas, entered F&I training in 1991, the curriculum was more motivational than technical.

"It was all about getting the salesperson pumped up, getting them motivated — and very little about the actual nuts and bolts of actually selling a car. We'd go to these rah-rah rallies — that was called training back in the day," Roennau said.

Tony Troussov, owner of Minneapolis F&I training company Mezen Dealer Services, said that today, equipping F&I managers with effective sales techniques is more important than pumping them up for the job.

"Motivation is important, but you can get it elsewhere," Troussov said. "What the people are really seeking is how to make an impact on their department."

Motivation without substance rarely led to a positive customer experience. George Angus, president of F&I consulting firm Team One Group in Scottsdale, Ariz., attended F&I training twice in the 1970s. In the "cocaine days" of the car business, Angus said, training was designed to inspire people up to go out and do whatever it took to rake in the dollars.

Success in the F&I office, he said, was "to get a deal, no matter what."

That mentality fueled negative stereotypes about dealerships, which persist today in many sales-resistant customers.

"If we go in with that attitude, that 'I'm gonna go out to kill people today,' we play into that stereotype and tell customers that everything they've heard is true," Angus said.

But getting rid of that approach, and the former sleazy advice, doesn't mean training now is perfect.

Dealers today say they want educated F&I managers, Angus said, but don't want to pay for it or to send staffers out of the dealership. Besides, there's plenty of information to be found online, he noted: The Internet is saturated with former F&I managers providing training tips.

"Everybody who's ever done F&I is now a trainer on the Internet," Angus said.

Ritch Wheeler, vice president of training at F&I product and training company American Financial & Automotive Services Inc., of The Woodlands, Texas, said previous F&I schools weren't necessarily unethical by nature. But the advent of the Internet and the resulting cultural upheaval forced the industry into a state of transparency.

"We as an industry have evolved" with the Internet, Wheeler said. "We had to really keep up with the buying expectations of our clients."

Tony Dupaquier, director of F&I training at The Academy, of Austin, Texas, said F&I training of the past had a heavy emphasis on product knowledge and objection handling. At the time he entered the space, there were only three products sold inside dealerships: service contracts, credit life insurance and credit disability insurance.

"There really wasn't a lot of training concerning presentation," Dupaquier said. "It was, 'Take all the knowledge and sell F&I products the same way that you sell the car — you give them a lot of information.' "

Today's customers can find that same information online, Dupaquier said. They aren't looking to get it in the store.

Technology can help sell F&I products, but it's important to know the limitations of that approach. Dupaquier said technology companies will claim that just by using their tool, a dealership can increase F&I product penetration by, say, half — even if it's as modest a boost as attaining 30 percent product penetration up from 20 percent.

"Granted, that is a 50 percent increase. But by coming to school [and] learning a process, that person will go from a 20 percent service contract penetration to a 55 percent service contract penetration, regardless of the technology that is used in the office," Dupaquier said.

F&I managers run higher numbers today than in the past in part because vehicles are more expensive and have more content, which raises the size of the auto loan while making guaranteed asset protection and extended service contract coverage more financially appealing to customers. But the higher numbers also reflect the fact that F&I managers are being trained in a process that is acceptable to today's customer base, Dupaquier said.

But finding trainers who understand today's customers isn't always easy. Troussov said many classroom trainers haven't spun a deal, or spoken to an actual customer, in years.

Adam Marburger, president of F&I training company Ascent Dealer Services, agrees that many trainers haven't worked with a customer in today's environment. "They typically can't show the F&I manager how it's done," he said. "They typically just talk about how it's done."

That's why Ascent Dealer Services sends its trainers to dealerships, in addition to bringing trainees to its F&I University classrooms in Chicago. That way, the F&I coaches work with F&I managers on their home turf, doing live deals together in the store and leading by example.