Change Is Inevitable - Are You Prepared To Hire An F&I Manager?

Once again you’re faced with the problem of having to hire an F&I manager again. Your current F&I Manager just gave you his notice ( if he was that kind to you) and the question is, do you take their two weeks to find their replacement, or were the warning signs already in place and you saw this coming?


Before you hire a replacement, take a minute to consider why you have to call your ad agency to place a help wanted ad. There are usually only a few reasons why your F&I manager is leaving:


o There was a change in the pay plan. If you think you’re paying your finance people too much money, just stop for a moment and think about how much they make for you. F&I is the only department in your entire dealership that has no overhead! There are no fixed costs to concern you with.


o You’ve hired a new GM / GSM or someone over your F&I manager, who wants to bring his own loyal people. F&I mangers are usually pretty devoted employees, so make sure the right person is leaving. If your recent hire isn’t working out, confide in your F&I manager and ask him to stay on. Remember that a disruption in F&I leads to contracts in transit issues which cost you money!


o One we hate to consider, is that there is a problem about to come back to haunt you. Has there been a rash of contract errors lately? Are your contracts in transit list growing out of control? Is your finance department hiding something from you until they get out of there?


If you’re going to have to make a change, now is the time to look at the setup of your F&I department. Do you have a primary and secondary or non-prime F&I manager? Have you set up your finance department to maximize your potential? Remember that non-prime customers must be sold and handled completely backwards from prime customers. Lenders are different, and as such, primary and secondary deals are structured differently. While your F&I manager is concerned with back end gross and product penetration, your secondary or Special Finance Manger should be all about maximizing front end gross and selling customers you might not have otherwise sold


Once you’ve identified the path to pursue and you’ve determined that you must find a replacement, where do you start?


o Talk to your lenders or potential lenders first and ask them whom they know is looking for job. Check with the local reps as well as the buyers/credit analyst for your market. These are the folks that an F&I manager will complain to first about his current position and ask them who’s looking for someone. They typically know all the players in the market, and can make a recommendation based on their past experience with these folks at their previous dealership. Credit analysts or buyers know who’s a whiner and who’s a worker, and can give you a first hand knowledge about a candidate you’re considering running your department. They also know who is a funding phenomenon as well as who is a flop. Make sure you have this information before you schedule an interview with a candidate. It’s helpful if you have an idea about whom you are talking to. Lenders love to have someone they already know to deal with, making your transition period that much less stressful.


o Try someone from outside your market. If you can’t get any lender to nominate someone locally, perhaps it’s because there really isn’t any great talent lying out there waiting for you to hire him or her. Consider hiring someone from outside your area, someone who doesn’t already have any preconceived notions about the market and the customers you serve.


o Some dealerships may consider promoting someone from within. Promoting someone from within your organization who has no experience may not be the best idea . You want to be sure that everything runs smoothly in the beginning while you continue to grow. Keep in mind that you really need someone with experience to keep your business moving along. Starting from scratch is difficult for many stores to do.


Make sure you have some way of insuring that your short-timer is not taking advantage of you and considering his final two weeks a license to steal! I always recommend that every dealership have some kind of contingency plan set up for just this situation. Keep in mind that, as great a person as you think your F&I manager is, do they really have your best interests in mind if they know they are on their way out the door? It’s important to remember that the loyalty usually lasts only until the final paycheck, then all bets are off.


In an emergency can your Special Finance Manager fill in for the short term until you find a replacement, without upsetting your Special Finance Profit Center? Don’t make the mistake of thinking that one man can do both jobs effectively. While it may be tempting to combine the two and save a salary, you can not for all practical purposes pay him properly enough to make it work well enough for both of you. Undoubtedly something will have to give, so the question remains which you are willing to sacrifice.


The bottom line is you will be faced with replacing an F& I Manager, a reality faced by dealerships daily. If you have properly planned and prepared for this inevitability the change should be positive.

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