How do you lead a department if you’ve never been in the trenches yourself?
One of the most common challenges dealers and general managers face is leading their F&I department without firsthand experience as a business manager. The concern is valid—without direct F&I experience, you can feel like you are flying blind. The good news is you do not need to have worked in F&I to build a thriving and profitable team. With the right structure, processes and leadership approach, any dealer or GM can drive F&I success.
This guide will break down four critical components of leading an effective F&I team: establishing the core responsibilities; identifying clearly defined metrics; developing a scoreboard that can be read at a glance; and executing fair, motivational compensation plans.
Focus on F&I
The F&I department is often a dealership’s most misunderstood and underutilized part. Although sales and service are frequently prioritized, a well-managed F&I department can be a significant profit center while enhancing the overall customer experience. Many dealership leaders struggle to put the pieces together.
No other dealership department varies as widely in performance as F&I. Some dealers operate at an F&I gross profit of just 2% of sales, while others exceed 15%. Given the revenue of even an average RV dealership, this gap represents a massive profitability difference—one that can determine a dealership’s overall financial success.
A common misconception is that F&I success is solely about selling products and securing loans. Those are key aspects, but F&I’s real value is its ability to protect the dealership, facilitate seamless deliveries and generate revenue in a structured, customer-focused manner.
Establishing the Core Responsibilities
If you asked business managers to list their top three responsibilities, what would they say? No matter the industry trends, technological advancements or shifts in dealership strategy, business managers’ core responsibilities remain the same. They always follow this order: Protect the dealership, deliver the RV and make money.
By following these priorities, an F&I department can operate efficiently and profitably while ensuring compliance and customer satisfaction.
Protecting the Dealership
No one should be more focused on protecting the dealership than the business manager. F&I must function as a safeguard against potential liabilities, including:
- Verifying funds: ensuring all payments are legitimate and collectible.
- Ensuring cashable bank contracts: avoiding Contracts-in-Transit (CIT) issues by having a clear process for sending contracts to lenders.
- Compliance: adhering to local and federal laws regarding sales tax, identity verification (Red Flags Rule) and secure document storage.
Delivering the RV
A business manager’s priority is to deliver the RV smoothly and efficiently with well-defined timelines for:
- Submitting deals to lenders.
- Contacting phone/internet buyers within a specified time.
- Ensuring all documentation is in order before delivery.
Who is responsible for scheduling RV delivery in your dealership? The salesperson? The sales manager? I would encourage you to consider having the F&I manager schedule delivery dates and times. The F&I manager can focus on delivering the RV as quickly as possible while maintaining an exceptional customer experience. When the F&I team executes a structured process, the sales team can focus on selling.
Making Money
The happiest customers are often those who generate the most revenue. A well-run F&I process enhances their buying experience.
F&I drives gross profit by:
- Selling value-added products such as extended warranties, GAP insurance and service contracts.
- Understanding lender niches to secure the consumer’s best financing terms while maximizing dealership profit.
- Converting cash buyers to financing by effectively communicating financing’s benefits in an RV purchase.
When the entire team understands the priorities, defining the process becomes much easier. Every decision can then be made with these priorities in mind.
Once established, take the next critical step—document the process. A written process not only enhances consistency and effectiveness but also makes your business scalable. With clear documentation, training new team members becomes more efficient, and promoting from within becomes seamless, setting the next person up for success.
Identifying Clearly Defined Metrics
A dealership cannot improve what it does not measure. Establishing clear, trackable metrics ensures that everyone understands performance expectations. Key F&I metrics may include:
- Product penetration rates: The percentage of deals that include F&I products such as service contracts, GAP or prepaid maintenance.
- Per Vehicle Retail (PVR): The total gross profit generated by F&I divided by the number of RVs sold.
- Turnover time: The time it takes to move a deal from the sales floor to the finance office and ultimately to final funding.
- Contracts-in-Transit (CIT) days: The average time it takes to receive funding from lenders.
- Chargebacks: The amount of revenue lost due to cancellations or refunds.
What should your dealership track? The answer depends on the specific goals and priorities of your dealership or dealer group. While every dealership may focus on different metrics, the key is to ensure they are clearly defined, actionable and measurable.
Once you have identified the most relevant metrics, narrow them down to one primary metric—or two, at most—that will drive all other results you are striving for. What is the single metric that, if improved, would have the biggest impact on your dealership’s overall performance?
Once the right metrics are in place, set clear expectations with your team. The most effective goals are not dictated from the top down; they are created with team input and buy-in. The most motivating goals are those that give your team a 50/50 shot of success.
- If the goal feels impossible (a 10% chance of hitting it), motivation will drop.
- If the goal is too easy (a 90% chance of reaching it), reaching the goal will not drive real improvement.
Take the time to get this step right. Identifying the right metrics and setting realistic, challenging goals will lay the foundation for a more profitable dealership.
Developing a Scoreboard That Can Be Read at a Glance
This year, we had several people over to our house to watch the Super Bowl. Instead of focusing on the game, I found myself watching the people in my home.
Throughout the night, people constantly referenced the score, which was displayed at the bottom of the screen for the entire game.
As I watched, I could not help thinking—what if the score was never shown or mentioned? Fans (and players) would be furious!
Yet, countless dealerships across the country operate without any clear sense of their own score.
Winners keep score.
A scoreboard creates transparency and accountability within the dealership. Every F&I team should have a visible, accurate and easily readable scoreboard that tracks the key performance metrics driving success.
Identify clearly defined metrics–simple, measurable and easy to track. Then, establish a scoreboard from those metrics.
A clear scoreboard helps managers quickly assess performance, address issues proactively and celebrate wins.
Executing Fair, Motivational Compensation Plans
Compensation drives behavior.
You have created a great process, clearly identified your performance metrics and are accurately tracking results. Now, how do you structure a great compensation plan that is fair to the dealership, rewards top performers and drives the right behaviors?
If you want your F&I team to focus on the right activities, you need a pay plan that aligns their incentives with the dealership’s goals.
I learned this the hard way.
The first time I designed an
F&I comp plan, I thought I created something brilliant—an intricate system with multiple levels, percentages and bonuses for nearly every possible scenario. It was incredibly complicated and ultimately ineffective. Want to design a great comp plan? Use the KISS method and keep it simple! Focus on three fundamental questions:
- Is my compensation, as a percentage of the gross, in line?
- Is the plan simple?
- Does it reward the right behaviors that drive performance?
Final Thoughts
Leading an F&I team, whether with or without prior F&I experience, is possible if the focus is on structure, process and accountability.
A well-led F&I department not only protects the dealership but also enhances customer experience and drives profitability.
By implementing these principles, any dealership leader, regardless of F&I experience, can build a top-tier finance team that contributes to long-term success.
Whether you are an owner, GM, finance manager or someone aspiring to enter the F&I department, these strategies will help you take your dealership’s finance department to the next level. I hope you start today.
Jamison Carrier is the founder of Relentless Dealer Services. He is an RV industry veteran with a track record of building elite teams and driving performance.
