Many pitfalls can cost your business greatly between the time a prospective buyer walks through the door and when they sign on the bottom line.
Optimized F&I Performance
Financing and insurance (F&I) can be one of the key profit centers for your business, but if it isn’t handled properly internally or by an outsourced provider, it can be a drain on your business.
At Finance Solution, we believe in transparency, which is why this post will center on some of the key problems your F&I may face. When you are aware of the potential mistakes that can be made, it’s much easier to avoid them.
1. When You’re Responsible Even After the Vehicle Is off Your Lot
Until a contract is 100% locked in and ownership of the boat or recreational vehicle you are selling is totally transferred, responsibility for the vehicle is still in your hands. This has implications for both sides of the F&I coin.
If someone rolls off the lot without the correct insurance binder in place and they get in an accident at the first stoplight, your dealership will likely still be responsible. Even if this only happens once per year—or once every few years—the cost will dramatically affect your bottom line.
2. Problems With Final Approval
If you aren’t working with an experienced F&I provider, there is a risk that your initial invoice will not line up with the amount stated on the loan approval. When the invoice is less than the amount required, you could be put in the precarious or embarrassing position of asking for more money down, eating the cost, or even canceling the sale entirely. None of these situations are ideal and could even harm the reputation of your dealership.
Other mistakes include failing to notice attempted straw purchases. If the name of the actual vehicle buyer is not the same as the name of the person on the final loan application—or even if the address is different—there is a chance that a lender will disqualify all future business with your dealership. An experienced outsourced F&I department will have the knowledge to catch these situations before they become a problem for your dealership.
3. Application Errors
In the end, your goal is to move units off the lot quickly and efficiently, and if there are errors on a customer’s loan application, the process will be frustratingly slower. A recreational F&I manager such as those at Finance Solution will ensure not only that the buyer’s information is correct but that the vehicle information is correct as well. Mistakes could include simple errors like mismatched serial numbers that could cause serious delays.
4. Unnecessary Delays
From scheduling payments too far out—for 45 days instead of 30 days—to a slow response to funding delays, it is easy to rack up unnecessary costs. The 15-day extension many dealerships offer customers on their first payment (either for goodwill or because of mistakes in the paperwork that must be corrected) is entirely unnecessary if a buyer has completed documents correctly and can afford to pay (a given).
When there is a funding delay, no respectable outsourced F&I or dealership should wait before addressing them. Almost all funding delays can be resolved on the same day. This is why working with the right provider is so important. Delays cost time and money. Take care of them right away.
5. Take Full Advantage of the Resources You Have
Dealership financing and insurance providers can’t do their job if they aren’t aware of each and every potential sale. If a salesperson doesn’t turn over the buyer to the F&I department immediately, how are they supposed to get the customer approved in a timely fashion? In the worst-case scenario, a potential buyer might even change their mind during the delay. This may seem obvious, but it is a good idea to reinforce to your sales staff that 100% of all sales must be turned over to F&I without any delay.
Can Outsourced F&I Help?
Many potential pitfalls can be easily mitigated by working with a provider that knows the ins and outs of the recreational vehicle market. Finance Solution has a record of closing loans on time and getting inventory off of our partner retailers’ lots. We’ve developed trusting relationships with lenders and insurers that help to minimize delays, mistakes, and unnecessary costs. Connect with us today!