Higher costs threaten used profits


“F&I is the only way to add profit to the dealership without laying out hard costs,” Cathie Clark told Canadian AutoWorld.

Despite the fact that used cars are more expensive to buy and recon, Clark says she finds dealers at a loss as to what to do.

When she prescribes turning to the business office, they have trouble swallowing the advice.

“There seems to be a feeling that profit in the business office is a dirty word.”

But it needn’t be, she insists.  

“If done properly, with the right partnership with an F&I supplier, where  dealers are getting the right products and training to offer a full suite of products, that’s really going to let the dealer structure the dealership so that more than half the front-end gross is coming from the business office.”

She runs Automotive Insider Consulting, an iA-SAL affiliate. The Clark family started the AutoPark SuperStores in 1999. She credits her years at AutoPark with giving her the know-how to run all phases of used-car store and pass on those smarts to dealers.

The title on her business card reads Remarketing Performance Consultant, “but at iA-SAL, they call me the ‘used-car girl.’ ”

She recommends training and more training for the business manager and the salespeople.

“A common fear, especially on the sales floor, is that selling products (in the F&I office) will jeopardize the deal.”

That’s not so, she argues.

“Most of the major banks will advance to cover extended warranty products and there’s a lot of flexibility in financing these days. Very rarely is there a case where it jeopardizes the deal and then only with subprime.”

And car buyers have an appetite for products that protect their purchase, she says. It’s all a matter of how they are presented.

With training, F&I managers and sales people come to see the importance of protection products and the confidence to recommend them.

She points to sales tools such as waivers and “exit packages” containing information on the value of the products customers may have just turned down.

“There’s no magic. It all comes down to having a customer-focused process with emphasis on the value of the products.  

But Clark cautions “It doesn’t matter how strong the F&I manager is. If the store doesn’t have an F&I-friendly sales process from the demo of the vehicle to the desking of the deal, you will see reduced potential for sales in the business office.”

Clark is speaking at Auto Remarketing Canada Conference March 17 to 18. Her topic is how to “Double your front-end used department growth with customer-focused F&I.” For more information, contact Cathie.clark@inalco.com or call 905-808-3940.