Where in the World Is Your Finance Penetration?

In 1971, C.P. Snow wrote about technology in the New York Times. He said, “Technology… is a queer thing. It brings you great gifts with one hand, and it stabs you in the back with the other.” Many dealers are voicing that sentiment these days. Far too few have done anything about it. Some have learned to use computer software with skill. They use the apps on iPhones, iPads, and Blackberries. They have created an effective Web site. They use Facebook Twi,tter, and LinkedIn for social networking. For others, these are merely words and technologies that test their ability to conduct business and their private lives. Dealers, already feeling the brunt of the two-plus-year recession and massive changes in the car industry, are becoming increasingly concerned about their ability to keep up and remain on the playing field. Nope! Why should dealers bother with such things? Isn’t the old way good enough?



Customers who always shopped on the lot now shop online before they step toward a dealership. They’ve researched every model in their price range and with their desired features. They’ve read a dozen articles about how to get the best deal. They’ve become savvier than many salespeople hired by dealerships; they know their credit score and where they can find the best price on insurance, window tinting, undercoating, you name it. Everything once sold to them by a finance officer from the menu is for sale online.

Are you one of the dealerships where handwringing has become a daily pastime? Have you taken a close look at your bottom line? Have you noticed what would happen to your financial portfolio if you removed your sub-event-rated and nonprime customers? Have the numbers of your prime-financing customers dwindled to an all-time low? Perhaps you haven’t seen the drop in your captive financing yet, but beware, it’s coming just as surely as the first snowstorm.

Snow was right back in 1971! The Internet can either become a beacon for drawing more satisfied customers to your dealership and vastly increase your bottom line, or it can stab you in the back. It can be your best friend or your worst enemy. How?

Statistics show that 80% of car customers go online before deciding to buy and before they come to your dealership. What are they researching? Brands, models, features, and, most of all, prices. Most of all, prices. Most Americans in today’s economy are deeply concerned about their budget. They have a fixed amount to spend on a car payment and all the other expenses involved in owning it. The vehicle they choose must fit within that revised figure. They cannot afford to buy on a whim or to make a careless mistake. They won’t take the chance of being duped into buying things they don’t want, don’t need, and can’t afford by a fast-talking sales or finance manager.

Where do these savvy customers get their information? One of their first sources is Edmunds, the friendly consumer shopping guide. Edmunds has never been and still isn’t the dealer’s friend. Edmunds does whatever is necessary to achieve the sale of vehicles and products from the Internet shopper… and then refers this buyer to specific retailers to obtain a fee! Banks. Finance companies. Insurance companies. You name it.

Don’t let them get a stranglehold on your customers! If you haven’t already checked this article on Edmunds.com, perhaps you should do so now! Confessions of an Auto Finance Manager In the Back Rooms of America’s Car Dealerships By Philip Reed, Senior Consumer Advice Editor, and Nick James


“Congratulations, you’re getting a great deal!” the car salesman pumps your hand. “Let’s sign the paperwork, and you’ll be on your way in your new car!”

At first, you’re relieved – the negotiating is over. But then the salesman walks you down a back hallway to a stark, cramped office with “Finance and Insurance” on the door. Inside, a man in a suit sits behind the desk. He greets you with a faint smile on his face. An hour later, you walk out in a daze: The whole deal was reworked, your monthly payment soared, and you bought products you didn’t want.

What happened to your great deal?

You just got hit by the “F&I Man,” also called the finance officer. He waits in the back of every dealership for unsuspecting customers to increase the dealership’s profit and boost his commission.

In this four-part series, written by veteran auto finance manager Nick James, you will learn the F&I man’s tricks and how to avoid them. When you’re done, you’ll be ready to navigate this crucial part of the car buying process safely, and the F&I man will never work his “magic” on you again.

– The Editors at Edmunds.com

Are you still ushering your customers into the office of your “F&I Man”? No? Have you a Web site? Do you update it once a month? Do you have a tech-savvy employee who checks your e-mail messages every morning? BUT… how would you answer these questions?

When your potential customers come to your Website, what resources do you have available to steer them away from online financing? Do you have a quick reference guide for buying the vehicle that fits their budget and your financing terms? Is the information presented in a complete, forthright, and friendly manner? Does it enlist confidence and trust? Will readers feel they’d get a no-nonsense financing deal from you?

If these online customers call to ask a few questions, does your finance manager answer them or resort to the former game of “I can only reveal those options when you come in for an interview”? Do they become discouraged by the process of reviewing transactions over the phone? Does your Internet manager always have direct access to your finance manager, avoid posting rates and product pricing on your Web site, and work well with your sales and finance departments? Have you utilized the I-chat technology to instantly answer your customers’ finance questions? How many phone calls to your finance department go unanswered daily? How are online customer calls being handled in your F&I office?

Reducing your finance penetration will not only affect the overall performance of your dealership but will negatively affect your reinsurance investment. If your customers are financing with someone else, they could also buy their other products. Take a long and serious look at the insurance products you sell, the agent who works with you, and the changes that must be made to keep you competitive with the technology available to all your customers. You must remain competitive in the products, quality, and prices. Should you be considering a new partner?

What new and creative processes are you providing your current and potential customers within your Web site? Do you have WebEx with a preloaded menu available for review with your customers, whether on-site in your finance office or in the comfort of their homes? Have you considered presenting your menu as a virtual finance manager? Why not?

An upfront sales approach is the best way to reestablish a thriving business in today’s technological world. Teenagers and college students are facile in using every conceivable tool involving the information highway. They are your future customers. They will find Edmunds and every comparable site and use the information to their advantage. Please give them a dozen reasons to buy their vehicle and products from your dealership. Ensure them that financing their dream car with you is the only sensible choice.

Although computer use and Internet technology have been around for several decades, they have taken a giant leap in recent years as more and more consumers realize they can save time and money by letting their fingers do the walking.


Alcohol scholar. Bacon fan. Internetaholic. Beer geek. Thinker. Coffee advocate. Reader. Have a strong interest in consulting about teddy bears in Nigeria. Spent 2001-2004 promoting glue in Pensacola, FL. My current pet project is testing the market for salsa in Las Vegas, NV. In 2008 I was getting to know birdhouses worldwide. Spent 2002-2008 buying and selling easy-bake-ovens in Bethesda, MD. Spent 2002-2009 marketing country music in the financial sector.