Tag Archive | "The Oak Group"

Making the Most of Time in the F&I Office


The average time consumers spend on purchasing a new vehicle is almost four hours from start to finish – and most customers agree this is way too long. Once the customer has chosen a vehicle and negotiated the sale, they proceed to the F&I office. There, the F&I manager has numerous products to present, and a growing number of forms and disclosures to deal with due to increasing state and federal regulations. Without unnecessarily adding to the total transaction time, F&I managers must go through all the steps from securing financing and presenting products to the signing of paperwork in a very limited amount of time. We spoke to top trainers and agents and asked them how to achieve customer satisfaction while facilitating an efficient and productive transaction.

The Bigger Picture

Tony Dupaquier, director of training for American Financial’s F&I University, says in most cases the problem with the transaction being too lengthy starts well before the business manager is ever involved. He estimates that 80% of the time, required information is left out of the deal when it arrives in the business office. He says the front end – not the back end – is the biggest contributing factor to an excessively lengthy transaction. “The issue is not the time it takes for the F&I manager to complete the transaction, it’s all that leads up to that,” says Dupaquier, “The F&I manager has to spend a lot of time running around getting information and correcting things that are wrong on the paperwork before they can even start their product presentation.” He says this still happens around 20% of the time with some of the best, most well trained sales managers.

Ron Reahard, president, Reahard & Associates, Inc., agrees. He believes the issue is not the time a customer spends in the finance office; it’s the time they spend waiting to get in the finance office that creates customer dissatisfaction. “The other issue is whether or not the customer feels the F&I process is adding value or aggravation to their purchase experience. If the customer feels the F&I person is genuinely trying to help them, they don’t care how long it takes. If the customer feels the F&I person is merely trying to sell them products they don’t want and don’t think they need, ten minutes is too long.”

So what kind of information is it that the business office has to spend time waiting for, looking for, or correcting? An example would be information that was either not obtained or was recorded incorrectly by the sales department, such as copying a customer’s address from their drivers license and failing to ask if they still reside at that address. In this situation, when the customer arrives in the business office, the F&I manager has to reprint and correct all forms that contain the customer’s address – wasting time that could be spent on far more valuable tasks. Other items that are often missing are the new and trade-in vehicles’ mileage, payoff amount, and the loan holder’s information. “So much time in the F&I office is spent correcting inaccuracies coming from the sales department! And it is a problem nationwide,” says Dupaquier.

In addition, if a customer simply has not been made aware of the required paperwork that they must provide – such as title, registration and proof of insurance – having to obtain it when they arrive in the F&I office adds significant time to the deal.

Putting the customer in the right car from the start – one that fits with the amount they wish to pay monthly – can also save an hour or two of what Dupaquier feels is often unnecessary negotiation. “Say the customer says they want to spend $400 dollars a month but the sales department puts them in a car that will cost $550 dollars. Then they begin negotiating the deal and it takes an hour and a half to do this. It drives me crazy!”

At a one-price dealership, with fully transparent pricing, the transaction time is significantly less than at a traditional dealership where price negotiating is the norm. According to Dupaquier, at a one-price dealership, the entire transaction could be done in the amount of time it takes to print out the paperwork!

Planning and Managing the Time Spent in F&I

Before the customer arrives in the F&I office, Steve Pearl, president, The Oak Group, says there are a number of time-saving maneuvers that the business manager can and should engage in. “The deal should be input to the computer for one thing. Another is the F&I manager needs to have a conversation with the salesperson and sales manager about how the transition was structured. The customer needs to be briefed ahead of time on what forms they need to provide, such as title and registration. Finally, the F&I manager needs to ensure the car is being prepared for delivery.”

Bill Kelly, partner/owner, Automotive Development Group (ADG), added that ideally, though it is not always possible, the F&I manager should be prepared with a structured, approved deal and a complete menu. “Title paperwork and other forms that don’t affect the numbers can be pre-printed prior to the customer arriving in F&I, so that the time spent in the office is used most efficiently.”

“It’s not secret agent spy stuff we are doing in the F&I office,” says Reahard, “The customer needs to ‘see’ what that F&I manager is doing – that he or she is preparing their paperwork as quickly as possible. The F&I manager needs to have time to discover the customer’s needs by asking questions as the paperwork is being prepared.” Reahard says the F&I process has to be totally transparent. “The F&I process should be viewed by the customer as expediting the delivery process, not prolonging it, and this requires F&I professionals to have the ability to multitask.”

The actual appearance of the F&I manager’s office is not something to be overlooked pointed out Gerry Gould, director of training, United Development Systems, Inc. (UDS). “Many F&I managers don’t get their office ready for business and it is in disarray when the customer enters it.” A clean, comfortable office environment sets the tone for a smooth, relaxed conversation with the customer. A chaotic office does not lend itself to making customers feel at ease.

Pearl believes that 45 minutes should be the typical time a customer spends in the F&I office. However if the customer has already been held up for a significant amount of time prior to arriving in F&I, he says it is the responsibility of the F&I manager to complete the transaction more quickly.

Menu Presentations

Presenting products using a menu offers numerous advantages. According to Pearl, Menu selling is a must – and not the old fashion paper menu. “With all the quality menus on the market, it not only makes the sale less confrontational but it also increases the speed.”

Kelly points out that the menu is just a tool; proper use of the menu is what makes it work. During their menu presentation, Kelly says the F&I manager should review the deal structure and then present up to eight products.

Kelly says that ADG has developed a two-step method to present up to eight products and deliver a complete menu presentation in five to seven minutes. If a customer has concerns or objections, he trains F&I managers to address those concerns in an additional five to ten minutes. Based on customer surveys, Kelly reports that some manufacturers are guiding dealers towards a 50-minute total transaction – this is from the moment the customer says “yes” to the sales person until the moment they leave the F&I office. However, once a transaction reaches F&I, he thinks the transaction can be completed in even less time. This includes all the necessary steps from credit approval, menu presentation and product sales to the completion of paperwork.

Reahard also believes that the proper use of a menu is key to a well given, succinct presentation. “A menu allows an F&I manager to present multiple products in a brief amount of time, and makes it easier for a customer to buy more products. The fact is, in the F&I office you can only sell two or three products before the customer has had enough, but a customer can buy six or seven products if they’re in a package on a menu. That’s why the manufacturers offer option packages, and McDonald’s has value meals.  Grouping products into a package makes it easier for a customer to see the value of buying a package.”

John Braganini, principal, Great Lakes Companies, says trying to present too many products to a customer can take up too much time if not done properly. Ideally, he says four to seven products should be presented using a personal, pre-printed menu.

Keeping the F&I presentation to 45 minutes or less is what Gould recommends as a best practice. He describes step-by-step how to deliver a presentation in just more than a half hour: “First, review each DMS screen in front of the customer. It should take no more than three to five-minutes to verify and gather information from the customer. Printing paperwork should take no more than eight to ten-minutes. A product disclosure/menu presentation should be no more than three minutes. This should be precise and to the point – no selling or lengthy descriptions. Handling customers concerns over purchasing products should be less than ten minutes. Finally, signing the paperwork should take no more than eight minutes.”

Gould emphasizes the importance of delivering a feature presentation without including the benefits statements. He says an initial focus on selling, rather that telling adds unnecessarily to the time spent in F&I and wears the customer out. Developing a presentation that presents each column of the menu as one complete option narrows the customer’s choices and allows the presentation to be done more swiftly. “Each product should be described in no more than two or three sentences and the description should only point out what the product does. For example, to describe a tire and wheel product, you would tell the customer, ‘Tire and wheel coverage pays to replace or repair tires damaged by a road hazard for the next five years. A road hazard is anything that’s not supposed to be in the road.’” A simple, yet concise explanation of coverage works best.

Advice from the Experts

The most often repeated advice Braganini gives to F&I managers is: “personalize everything and project confidence.” He emphasizes good presentation skills, having a prepared menu and loading the deal in the DMS before the customer’s arrival. By doing all of these things, you will be ready for an effective conversation with the customer.

There are several sayings that Pearl has used many times through the years.

  • “No one has the right to say no for a customer. Be sure the customer is presented all the products available.”
  • “If a customer says no the answer should be ‘ok’. This totally diffuses the customer’s barriers. You can then circle back at a later point.”

And this leads to his last piece of advice…

  • “Conversation not confrontation.” Be able to discuss the pros and cons rationally and logically without putting it in the customer’s face.

Gould says rather than waiting on a customer to be dropped off in the F&I office, F&I managers should be proactive. “Get off your axle and meet the customer in the showroom!” Then, when giving the presentation, he advises F&I managers to “tell” initially and “sell” once you have the customer’s attention.

Take it from the pros – incorporate these tips and time saving tricks, and you will find a great starting point for improving efficiency, and streamlining transactions. The result? Satisfied customers and profitability in the F&I office.

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Closed Deal Announcement – Peakstone Advises The Oak Group on Strategic Alliance with Total Warranty Services, Inc.


The Oak Group has entered into a strategic alliance partnership with Total Warranty Services, Inc. (“TWS”) of West Palm Beach Florida.

Founded in 1975, The Oak Group (including its related affiliates) is a leading master general agency and third-party administrator of vehicle service contracts (“VSCs”) and related ancillary products sold through automotive dealerships nationwide. Oak’s managing principals, Steve Pearl and John Peterson, are two of the most respected industry leaders in the Automotive F&I industry and pioneers in product innovation in the F&I marketplace. They have built a highly successful agency that is also a leader in reinsurance, providing customized programs for automotive dealerships.

“Peakstone’s dedicated Auto F&I practice team, led by Brad Curtis, delivered us a terrific outcome and found us a great strategic partner to extend upon our longstanding reputation as a leader and innovator in Auto F&I products and administration,” said Steve Pearl. “Peakstone developed and executed on a highly targeted strategy and led every aspect of the process in a highly efficient and discrete manner and brought us a partner in TWS that will greatly benefit Oak’s customers by bringing additional strategic resources to the Oak platform,” Pearl said. John Peterson, added, “Peakstone delivered us numerous strategic options that enabled us to select the best partner for Oak employees and stakeholders for accelerated growth. We are extremely pleased with the result and we could not have found a better partner in TWS to build upon the Oak franchise.”

Peakstone has a dedicated practice covering the Automotive Finance & Insurance industry and has completed numerous transactions in the sector.

The Peakstone Group served as exclusive financial advisor to The Oak Group in connection with this transaction. Terms of the transaction were not disclosed.

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Overcoming Dealer Objections to Technology


The technology used to facilitate the F&I sales and contracting process is constantly evolving; what worked – or didn’t – yesterday could be completely changed tomorrow. From eContracting and eSignatures, to menu and other F&I product quoting and contracting systems, agents have their hands full when it comes to convincing dealers to adopt new technologies. Some dealers are comfortable and don’t want to change, while others are resistant to change, no matter what that change may be. The challenge for agents is convincing those dealers that while there will be some initial frustration while their staff adjusts, the long-term benefits will lead to a much more profitable, efficient and successful process.

Agents and providers often view technology as an ongoing source of developing solutions to make the processes that make up the F&I office more accurate, efficient and profitable. And they are eager to get all their F&I managers on board. Human error is eliminated, contracts are submitted quicker and the customer experience is smoother – everyone in the F&I process, from the provider, to the agent, to the dealer, to the end consumer benefits from new technology. The problem is that the F&I manager does not always see it that way, and as obvious as the benefits may seem to the agent, the F&I manager resists with every objection they can think of.

Some managers, particularly those who are experienced in the F&I office but did not grow up with technology, may see new technology as a commentary on their job proficiency. Others object simply because it changes the way they are accustomed to doing things. Change in any form can be painful, particularly for those who have experienced success without technology for decades.

“It is not always the easiest process to convert a dealer who is not using technology,” said Jim Maxim, Jr., president, MaximTrak Technologies. “People usually take the path of least resistance, and if the dealer allows them to continue paper rating and putting the forms through the impact printer because it has worked for 25 years or more, they just will not change. But you have to embrace change, because if you don’t, you’re going to get left behind.”

To be effective, agents must be comfortable using the technology themselves. They need to be educated on how it benefits everyone in the F&I process. Only then can they effectively convey this to the dealer principal and then adequately convince and train the F&I manager.

“Agents need to be up to date on all the technology available,” said Steve Pearl, president, The Oak Group. “The agent needs to know all of the positives and negatives of every piece of technology, as well as how it will assist the F&I manager and dealer principal.” But, he went on to say, it is an uphill battle at times. “You can’t say that dealers in general are falling short with technology adoption. It is a very specific, dealer-by-dealer process. What we tend to find is that with the dealers who are falling short, it tends to be an age-based item; not everyone reacts that way, but certain people are resistant to change. They have always done it one way, and they don’t want to change; that’s not the case every time, but it tends to be one of the bigger issues.”

“I’m not sure I’ve ever heard the words ‘switch and easy’ used together to describe any technology transition,” said Patrick Donahue, president and CEO, Agents Management Group. “Regardless of the potential or immense upside, this is change, and human nature rarely deviates. Those that seek change reach a comfort point faster than those who feel they are being unfairly penalized or compromised by the structure that comes with technology.”

Mick Rabley, agent, Great Lakes Companies, categorized dealers into two types: “Those who embrace technology and others who pretend they embrace technology. The dealers that embrace technology are positioning themselves to make the technological transition. There are challenges, but they are meeting those challenges and finding the way to succeed. The dealerships that don’t embrace technology use every excuse created to circumvent the transition. The difference between these two types of dealerships is the ones that embrace technology have an individual with authority driving the technology through the dealership, and have the commitment from the dealer and department managers to succeed in this endeavor.”

Overcoming the Objections
There are a few ways to handle some of the top objections dealers offer for their resistance to new technologies. The first objection is that they tried it once in the past and had a bad experience, or have heard horror stories and are hesitant to make the leap; this is where the agent can point out that what might have been an issue even a year ago has drastically changed today. “I have seen more change in the last five years than in the previous 20 in technology in the automotive world,” said Bill Kelly, partner, Automotive Development Group.

“We are better off than we were even five years ago, but we’re not where we need to be,” noted Pearl. “The cost of new technology is coming down, and there are good providers with good solutions across the board working on getting the technology to a place where it is easy to use and at an affordable price. At the end of the day, for the agent, convincing a dealer to use a new technology comes back to the basics of selling. No matter what type of sale it is, the customer – in this case the dealer – will buy when they perceive that the value they’re receiving exceeds the price they are paying. There is value in the new technologies, but that value has to exceed the price; as providers are increasing the value, adding more bells and whistles, they are also decreasing the pricing, and I believe if we keep crossing that threshold, what will occur is more technology will be used. And that is an extremely important thing.”

Another objection is the lack of a common point of entry among the various technology solutions. “Technology comes at F&I departments from every compass setting,” noted Donahue. “Product providers, service providers, lenders, software firms, regulators, manufacturers and DMS providers all have some technology to offer. Unfortunately, very few of these systems talk to each other and even fewer have an open architecture that encourages use in concert with other systems.”

There are several solutions on the market today, however, to help address that problem. These third-party systems act as a single point of contact for the F&I manager, streamlining the process and simplifying data entry, and agents should educate themselves on what those solutions are, and what benefits – and drawbacks – each one brings to the table. A good agent can overcome this objection by knowing the system they believe is the right choice for that dealership – and be able to explain it in a way that makes the value clear. If the agent cannot explain how their chosen solution is different from the rest, then it will be a hard sell to convince a dealer of the benefits.

Another challenge for agents is that the dealership has hardware that is not capable of running the more advanced technologies. Today’s software programs require more computing power and faster Internet speeds, and for some dealers, that is a barrier to entry.

“Dealers are slow to adapt because it usually means that they will need to increase their Internet speed and get better computer equipment in the finance office,” said Kelly. “The efficiency and speed, along with the added benefit to the back office, should push every dealer to have the best computer equipment in the finance office.”

Rabley listed the top objections he has come across from dealers who don’t want to change their F&I technology:

  • Resistance to change – we’ve always done it the old way and it’s difficult to learn the new process.
  • Double entry – due to the lack of integration, the cost or reluctance to purchase the integration option, information has to be input multiple times.
  • Different processes – the F&I sales process is intricate and detailed enough without adding four or five different protocols for different products.
  • Lack of training – dealers get the new technology but have no idea how to use all the features to their fullest.

The Value of Training
Once a dealer has been convinced of the benefits of a new technology solution, and has implemented it in the F&I office, the agent’s job is not done. Effective training on how to properly use the technology is a key element in getting the F&I managers to embrace the changes and realize the full potential the agent promised.

“There has to be extensive training in order to get the dealership personnel comfortable with the change,” said Rabley. “This cannot be a ‘one size fits all’ training process; everyone learns differently. There are visual, audio or kinesthetic learners, and the training needs to be suited to impact each type. Again, the ‘one size fits all’ training creates a struggle for the dealership and the technology provider.”

Maxim agreed that training is necessary, but he believes in a more unified approach. “At the dealer level, it is important to develop a standardized training practice that your reps can become very good at in the field. Too often, what we see is that there are different processes all over the map for every single dealer, and if you have a new rep come into the territory, the process and/or business practice may be very specific to that dealer. So what agents need to do is get one common business practice across all dealers and all reps, so they really leverage their time and efforts.”

No matter which approach an agent chooses to go with, the content is ultimately what matters. “We monitor our dealerships to make sure the new technology is used 100% of the time,” said Pearl. “What we find is that, inevitably at large dealership, 2-3 embrace it, and the rest don’t. So we work with them, talk to them, teach them how to use it. That is one of the major pieces that we do when consulting with the dealer.”

“Today’s technology training we perform is one of facilitation,” agreed Donahue. “We have providers that all offer helpdesk-type resources and tutorials that demonstrate benefits of an individual product or performance driven technology. We make certain our F&I managers have been prepared to excel in the use of new technology. And we are in active discussions with our providers to become certified in the use of their equipment, which would allow us to provide seamless resources for all technology within our offerings.”

“We incorporate the technologies right into our weekly training visits as well as during our F&I workshops,” said Kelly. “We also use the technology tools as often as we can to help solidify our training initiatives.”

Success Stories
There were many encouraging success stories from our experts, where a resistant dealer finally realized the value in switching to a new technology, which in turn resulted in processes becoming more efficient and accurate, which led to increased profits.

Donahue shared one such story about five experienced finance managers in a large dealership, who were not well versed in the use of technology. They were suddenly required to use a touch screen solution in their presentations, and not only were they resistant, they seemed to view the requirement punitively – as if prior to that point, their performance had not been up to par. Over a two-year span, all five of these original managers were replaced, and the new employees came in with the expectation that the use of the technology was nonnegotiable – it was simply the way business was to be conducted. The new managers also happened to be on the more youthful side, and were naturally more comfortable using the required technology. The end result is that productivity, accuracy, efficiency and yield all are up at that dealership. The volume increased as well, yet they did not have to expand their F&I department because of the newly increased efficiency, thanks to the technology, now securely in place.

Rabely had his own story illustrating that sometimes, no matter how great the system is, it takes buy-in from the whole dealership to effect the change. “One of our dealer’s F&I departments did not want to take the technological plunge with a provider because of the myriad of reasons we usually hear: It takes too long; I have my process I don’t want to interrupt; it’s double entry; I would rather print the contract on the DMS than online; the dealer cost sheet is easier to use; and my dog ate my term paper. After a few months there were so many rating errors, it was decided we needed to train the support staff on how to use the Web site to rate and submit the contracts to the provider. Finally, the support staff said, ‘how come F&I doesn’t use this portal? It is really easy to use and it’s idiot proof.’ Guess what motivated the Financial Services department to start using the portal?”

At the end of the day when the agent is able to clearly articulate the value and the dealer embraces the change, new technology can catapult the dealership into the next level of sales and profit. Change is never going to be easy, especially with how quickly technology is changing, but the agent who knows the objections and is ready to counter them, and has the skills and knowledge to guide the dealership through the process, will be well prepared for anything the future might hold.

“Finance people and dealers that accept and push for new technology, and listen to their agents, will be the dealers who continue to thrive,” said Pearl. “They will be at vanguard of what is going on in the future. People who resist the technology will be a step back. They won’t make the income that’s necessary, won’t be compliant, will sell less cars at less gross, and they will expose themselves to much more litigation in the future.”

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