Hello all, I am a newbie to the auto sales world, and have found myself thrust into a somewhat broken Finance Manager position. Here's the story... I am a college student pursuing a BAS in accounting, and I was waitressing in a particularly horrible little restaurant when a customer approached me with a job offer. He said he needed an accounting person, and I agreed to go interview. Once there, it became apparent that he needed a CPA, not a bookkeeper, so I let him know it was not a good fit, but he switched tactics and told me about another job needing filled, the Finance Manager position. He offered to train me and offered me a wage better than I was currently making, so I accepted. Now, two weeks in, I realize what I have taken on... but I gave my word and I must stick to it. I am humbly requesting any help, advice, tips or warnings that anyone is willing to give. Our dealership has a mountain of issues to surmount: it has just changed owners (two months) and has very few banks to partner with, we are an independent dealership, and the previous owner was a notoriously shady character. The good news: we own all of our inventory, and we have somewhat of an established client base, and the location is prime and consistent for over 15 years. The new owner is a wonderful guy who has a ton of years experience in car sales and business in general, but this is his first dealership, so we are all trying to figure out what we are doing. He is a very ethical and kind man, and I very much want to help him succeed. I need help to figure out how best to get established, I am having no luck finding banks since we are so new, does anyone have any advice? Thank you in advance!
Advice and Tips Appreciated...
- Thread starter KaseyLynn
- Start date
- Sep 4, 2015
- 112
- 85
- First Name
- Adam
Wow....good on you for sticking it out. This could be an incredible start to an exciting and prosperous career.
First thing I would ask the dealer is if he has partnered up with any F&I consulting/service group (EFG, Ethos, Service Group, etc.) I'm going to guess the answer will be no and I would highly recommend pursuing one. They can provide you the training you need and the processes/infrastructure to keep you legal, above board and extremely profitable. For the dealer, they can provide good aftermarket products at good margins and the reinsurance opportunities will become a great profit-center for him.
Hard to give advice on finding banks. I have always been very fortunate to work in established stores with great relationships. My advice would be to get very tight with your captive right now and make sure that relationship is strong. Local credit unions can help a bunch as well. Invite them to your store and introduce them to the new dealer. If the old guy sucked, they will appreciate a solid, ethical business owner that could send them more paper.
Hope this helps. Best of luck to you! Please keep us posted as you grow your department and share your victories and defeats.
First thing I would ask the dealer is if he has partnered up with any F&I consulting/service group (EFG, Ethos, Service Group, etc.) I'm going to guess the answer will be no and I would highly recommend pursuing one. They can provide you the training you need and the processes/infrastructure to keep you legal, above board and extremely profitable. For the dealer, they can provide good aftermarket products at good margins and the reinsurance opportunities will become a great profit-center for him.
Hard to give advice on finding banks. I have always been very fortunate to work in established stores with great relationships. My advice would be to get very tight with your captive right now and make sure that relationship is strong. Local credit unions can help a bunch as well. Invite them to your store and introduce them to the new dealer. If the old guy sucked, they will appreciate a solid, ethical business owner that could send them more paper.
Hope this helps. Best of luck to you! Please keep us posted as you grow your department and share your victories and defeats.
- May 1, 2006
- 3,614
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- First Name
- Alex
and welcome to DealerRefresh @KaseyLynn 
Even though the work efforts are incredibly high, getting in on the ground floor is the most exciting way to be a part of a business. We're here to answer any questions you have along the way. Although most of us come from the franchised dealership world, we all battle with many of the same technologies and issues. Direct questions are usually the ones that get answered best.
Like @AdamMurray my experiences have only been with established dealerships where lender relationships were already in place. Hopefully someone here can come to your aid on how to get a new lending relationship started.
- Nov 17, 2017
- 52
- 55
- First Name
- Brendan
Some F&I basics: Show 100% of products to 100% of customers 100% of the time. Don't convince yourself to ever shortchange this process.
For F&I Products: I was at a group that used JM&A. I'd work with the owner to research which company you think will work best. You'll need someone to help you sell products, train you, and give you best practices.
New banks: it's literally as simple as calling them. At a minimum, you'll want to partner with local credit unions, Captial One, Chase, Santander, any military lenders if a base is near by, and major banks like BofA, Wells, etc. Google name of bank plus dealer services, and call the support lines.
Now for my pet peeve: contracts in transit. Cash flow makes the car world go round. Get your deals funded ASAP. When the customer leaves with the car, get everything faxed/emailed/fedexed over to the bank ASAP. Target to have your deals funded with an EFT into the stores operating account in no more than 5 days. If there is a funding delay, send a 10 day letter in certified mail. It's a red alert if the deal doesn't fund in 10 days, and don't hesitate to ask for the car bank if the bank wont fund the deal closing in on 30 days.
As a Finance Manager, your main goal is to sell products, and collect money. Aim to have $2,000 worth of gross profit sold per car deal, 2 products per deal, and $0 contracts in transit past 5 days. Sell products, collect money. If you can do both, you'll be a world class F&I Manager.
For F&I Products: I was at a group that used JM&A. I'd work with the owner to research which company you think will work best. You'll need someone to help you sell products, train you, and give you best practices.
New banks: it's literally as simple as calling them. At a minimum, you'll want to partner with local credit unions, Captial One, Chase, Santander, any military lenders if a base is near by, and major banks like BofA, Wells, etc. Google name of bank plus dealer services, and call the support lines.
Now for my pet peeve: contracts in transit. Cash flow makes the car world go round. Get your deals funded ASAP. When the customer leaves with the car, get everything faxed/emailed/fedexed over to the bank ASAP. Target to have your deals funded with an EFT into the stores operating account in no more than 5 days. If there is a funding delay, send a 10 day letter in certified mail. It's a red alert if the deal doesn't fund in 10 days, and don't hesitate to ask for the car bank if the bank wont fund the deal closing in on 30 days.
As a Finance Manager, your main goal is to sell products, and collect money. Aim to have $2,000 worth of gross profit sold per car deal, 2 products per deal, and $0 contracts in transit past 5 days. Sell products, collect money. If you can do both, you'll be a world class F&I Manager.
It is exciting, and I appreciate your advice! Thank you!
Even though the work efforts are incredibly high, getting in on the ground floor is the most exciting way to be a part of a business. We're here to answer any questions you have along the way. Although most of us come from the franchised dealership world, we all battle with many of the same technologies and issues. Direct questions are usually the ones that get answered best.
Like @AdamMurray my experiences have only been with established dealerships where lender relationships were already in place. Hopefully someone here can come to your aid on how to get a new lending relationship started.
This was incredibly helpful, thank you! I'm glad to see my instincts were correct in the priority and goal profit margin areas! Yay! Question, do most dealerships have their own version of GAP and VSC to sell? Currently I can only sell them through the finance companies I have and sometimes we lose money instead of make money when the options are added. We only have extremely sub-prime lenders (lobel and credit acceptance) at the moment besides local lenders and banks.
- Sep 4, 2015
- 112
- 85
- First Name
- Adam
As Brendan pointed out, start researching some F&I support companies and they will all have a host of products you can sell with good margins and reinsurance dividends for the dealer. I have worked with Ethos and Service Group in the past and they were both excellent. Brendan mentioned JM&A and I have heard good things about them as well...they are definitely one of the largest in that space.
- Nov 17, 2017
- 52
- 55
- First Name
- Brendan
Adam was on point. Sell the products from your vendor partner; do not sell the lenders products. You want that profit in the dealers pocket, and your pocket. We used to sell VSC's with a 2x markup over cost, so it's an easy way to add some coin to your pocket.
Diversifying lenders is great too. If you can get a solid approval, but then work a second bank for a better approval, selling a GAP and VSC is easy. "One bank approved you at 6%. I fought for you, and got another bank to approve you at 3%. Great news is that savings now allows you to have XYZ product to further protect your investment for the same amount of money that you were prepared to spend!"
- Jan 5, 2018
- 6
- 7
- First Name
- Michael
It sounds like you are prioritizing and triaging problems already, which is a great start. One of the big questions you need to answer is whether you are presenting a commodity or a customized solution for your customers? Are you making money on the vehicles themselves or only on the financial transactions and products? Look at inventory turns, purchase strategy and "all in" costs to bring vehicles to market. Figuring out where the revenue stream is can help you focus your resources. Tying up too much cash in inventory can be a costly mistake. Follow the money. Sounds like a big sticky problem but most likely far from hopeless. Keep us posted on how it is going. You've chosen a great industry to be in, welcome!
