Over the last two decades the Finance and Insurance Department has emerged to be one of the most important profit centers of any automobile dealership. Even with the emergence of the Internet, an average F&I department will yield over $500 per vehicle retailed (PVR). Benchmark departments will commonly break the $1,000 PVR barrier. In addition, dealerships are finding the numbers once again on the rise with the shift back towards retail financing as opposed to leasing. Without question, the department in many dealerships makes an overwhelming impact on the bottom line.  

Reflecting on my years as a dealer, I can remember my own forecasting exercises where either my general manager or I would work to project total retail sales gross. We would carefully predict sales rates using an appropriate new vs. used mix and adjust it for seasonality and other market conditions. Finally, we would just “fill in the blank” with the expected F&I gross simply by multiplying the number of units by the expected average F&I income PVR. It was a number you just, well, took for granted—at least until you had an unexpected opening in that department.

A recent survey of dealers on AutoDealerDaily.com indicates the F&I managers of nearly 60 percent of the respondents have less than three years job tenure. From a dealer’s perspective, that has to be disconcerting. If taken into consideration how important the department actually serves as a profit center, it goes without saying that it is an area you really don’t want to experience high turnover rates. But somehow that’s what’s happening. Why?

If you ask a typical finance manager what they earn, their response is usually, “Not enough!” Is money the real factor that keeps the managers moving? Maybe, but likely not. Burnout seems to be a common malaise among “former” F&I managers. True, they may want more money. Yes, the extra money might be what causes the grass to appear greener at a different dealership. But ultimately, it is not money that initially starts them looking. It is burnout. The lack of a life. The stresses of working five and six days at 60 to 75 hours a week. The stresses of having to sell product, sell the deal, insure all documents are correct and who knows what else. The stresses of earning a good income (nationally, according to NADA, F&I managers averaged earning just under $70,000 in 2000), but having little or no time available for their family.

If the retail automobile business has an Achilles heal, it is with people, or lack thereof. You will never find a high-dive by the gene pool in the car business. It takes a talented, trained (and most often licensed, professional to excel in the finance department. In other words there isn’t an overabundance of them.

When a dealer finds one, it seems that they are taken into “the box,” chained to the desk, left with the door guarded and told to keep their PVR average high. Granted, there are probably very few dealers that would admit to thinking that, let alone doing so. Unfortunately, in practice, it probably occurs much more often than you would think.

What happens is that the needed days or weekends off for the F&I manager are not scheduled, are discouraged or are not taken so that the “busier” days in the dealership are covered. (What days aren’t busy to a dealer or general manager?) Think about who is often the last person to walk out of the dealership. The F&I manager, of course, who stays around an extra two hours to contract one last deal.

Yes, at times it would seem we are our own worst enemy. We identify the higher caliber professional, invest in them, train them, and then forget what the job is that we’ve asked them to perform. What we need to do is get them “outside the box.”

Time away, more so than money, can be a lifeline for both sides. Some dealers cringe at the thought of having their F&I manager out over a weekend—any weekend. They feel that they just can’t afford to have the department “uncovered.” I would disagree. In the short term, how do you quantify the number of lost opportunities on product sales or cash conversions that didn’t occur because the F&I manager just didn’t have their head in the game that day? That week? That half of a month? Additionally, forget the products for just a moment. How many deals themselves do you think then fall apart?

I strongly feel that a fresh and rejuvenated F&I manager will more than make up for the few missed opportunities the day or two he was outside the box. Apparently, a number of dealers in our 20 Groups are feeling that way, and some are now providing a three-day weekend at least once every month to ensure their key employees stay fresh and motivated. Ironically, these dealers maintain above average F&I income PVR, while keeping their F&I compensation below group average.

Sometimes the key to increasing F&I profits isn’t necessarily better turnovers from the floor, a change in compensation plan or even a new and improved selling system. Sometimes it is just being willing to think outside the box, and then getting your F&I manager there, for some ongoing R&R.