F&I stands for finance and insurance in the automotive industry. F&I managers usually work in a dealership’s F&I department (also sometimes referred to as a business office). It is through the F&I department that vehicle loans along with any optional financial or insurance add-ons are marketed to the dealership’s customers. Keep reading to learn more about the role of a dealership’s F&I department and the roles that an F&I manager plays in the dealership’s success.
How Important Is the F&I Department?
Without an F&I department or F&I manager, many auto lots and dealerships wouldn’t be successful. Just because someone agrees to buy a vehicle doesn’t necessarily mean they can pay the full asking price before driving the car off the lot. Because of this, and to protect the dealership’s best interest while also increasing incoming revenue, many auto lots offer financing resources; this financing often comes through third parties, such as banks and auto loan lenders. When dealerships connect customers with these banks and loan lenders, it becomes much more likely for a completed sale to take place. Ultimately, by offering F&I services, the dealership’s best interest is protected thanks to banks and auto lenders covering the cost of a purchased vehicle while still taking on the risk of not receiving the loan paid in full by the loan holder.
The success of most automotive dealerships depends on the F&I department and its managers.
As the automotive dealership industry continues to evolve, so has the role of F&I managers. The sole responsibility of the F&I manager is to protect a dealer from financial harm when selling new or used inventory. To ensure this goal is met, the F&I manager must establish a vast network of financial resources that the dealership can tap into to help customers buy the vehicles they want. The F&I manager does much more than help secure financing resources for the dealer. He or she also leverages tactics to sell optional protective options to customers as a way to establish additional income streams for the dealer.
What Do Dealers Look for in F&I Managers?
It requires a vast knowledgebase of various roles to succeed in the primary role of an F&I manager. Many dealers require F&I managers to have at least two years of experience in automotive sales along with certification from an F&I training program. Most dealers also mandate F&I managers to have significant experience in managerial roles; however, some dealers do prefer filling F&I positions with someone who has no prior managerial experience but is ready to accept such a role. Two of the most pertinent skills needed for an F&I manager to be successful are clear communication and advanced organizational capabilities.
What Is the Most Important Skill Needed By an F&I Manager?
Dealers don’t want to hire F&I managers that they can’t trust. This is why honesty and integrity are cornerstones of the value of F&I managers. The tasks that F&I managers perform to be incredibly extensive and particularly demanding. With the overall purpose being to protect the dealership, including its owners, from any legal issues, the role of the F&I manager becomes all the more important. To do this, F&I managers must always make sure that the customers and financial entities they work with are really who they claim to be.
If an F&I cannot clearly communicate with customers in such a way that they understand each and every detail of the contracts they sign with the dealer or financing agency, then a dealer will likely lose out on sales as well as face a higher risk of financial loss.
Regular Job Duties of an F&I Manager
Most F&I managers spend their time performing multiple tasks throughout the workday. Much time is typically spend providing thorough explanations to customers regarding the protection programs offered by the dealer (these programs are usually offered through vehicle service contracts). There’s also a lot of time explaining to customers what the APR and any finance charges will be if the customer qualifies for a loan. Very crucial to the manager’s role is the discussion of any disclosures that exist in the contract being signed by the dealer and customer and any involved financial entities.
When not interacting with customers, F&I managers spend their time building and maintaining relationships with various lending institutions and insurance vendors. These managers also take on the responsibility of creating and providing training to the sales team regarding the available lease and finance programs that can be mentioned when selling to a customer.
Also performed by the F&I manager is the task of making sure each and every sale is processed accurately. This requires F&I managers to study and stay up to date on the latest technology and security practices used when processing a deal.
How to Become an F&I Manager?
To become an F&I manager, a person can greatly benefit from going to college and earning a business degree. However, many dealerships don’t necessarily require a formal degree. Instead, they want to see managerial experience and impeccable interpersonal and communication skills in the F&I managers they choose to hire. Because F&I managers have to interact with numerous parties on any given workday, they must exhibit superior and first-class customer service at all times. The dealer’s reputation is often determined by the role of the F&I manager. After all, it’s this manager who interacts with every party involved in a sale.
Do Dealers Train Their F&I Managers?
Ideally, dealerships should hire F&I managers with prior experience in the automotive dealership industry, but no experience isn’t always required. In fact, a lot of dealers prefer to hire F&I managers who have no prior experience. Why? Because this allows them to train the F&I managers according to the dealer’s unique and precise needs.
If you’re thinking about becoming an F&I manager, makes sure to check out the various degree and certification programs available. The more experience you have in F&I, the better as this allows you to expand your ability to offer dealers and customers the best service and options possible, which is a win-win for everyone.