BOWERS NOTES

Part 1: Meet the Customer

How important are those first few seconds in meeting a customer who is apprehensive about the next hurdle in the buying process and expecting the worst to happen?

The first few seconds set the stage for all that will follow. You have only the first few seconds to allay suspicions, defuse defensiveness, and put the customer at ease with you and the F&I process.

It isn't hard to imagine why a customer might be "on guard." Put yourself in the place of the customer who knows that somewhere in the dealership someone other than the person who sold the vehicle is busy crunching numbers that will make or break this deal. Meanwhile, the sales consultant who was so attentive a little while ago is now struggling to make small talk and seems anxious to be somewhere else.

If this scene seems familiar, you are missing a prime opportunity to create a positive atmosphere for your customer. All you need to do is leave your office, go out to the salesperson's workstation, and take the initiative to meet your customer.

Minding Your Manners

Physical and verbal mannerisms matter. Make sure your body language and gestures model your words in four key actions:

1) Make physical contact. Extend your right hand in a friendly manner, offering to shake everyone's hand. After all you are very glad they chose your store to purchase their vehicle.
2) Establish eye contact. The eyes are indeed the windows to our souls. You want to communicate a soul full of openness and sincerity. Look each person directly in the eyes as you shake hands — and smile!
3) Repeat the customer's name three times. The loveliest word in any language is the sound of one's own name. If you say the customer's name three times in the first two minutes, you will enhance your ability to remember it and use it. Your customer will feel like they matter and you will have set the stage for making inquiries about personal financial matters seem less intrusive.
4) Get the customer to say your name once during the first two minutes. Present your business card and ask the customer to write next to your name: "For questions, call __________." Then ask the customer to place your card in their wallet. You will be the last person they see, and the first one they remember if they want to talk to someone about the vehicle. Make sure they get your name right!

WWWWWHO Are You?

Some dealerships now use signage like Financial Center, Business Office, and even Escrow (!) Office in an attempt to make their customers feel less intimidated by the F&I process.

However, you will find that taking a few moments while you are still in the sales consultant's workstation to introduce yourself and your role in the sales process is far more important than what the sign says.

Meeting of the Minds

While customers understand that paperwork usually follows every vehicle sale and the paperwork needs to be completed somewhere, few things create anxiety more than being left behind to wait. Minutes seem like hours, and each one that passes diminishes the CSI.

When customers are involved in the process hours seem like minutes. The challenge is to create a friendly, participative process from the start. And that means you need to get out of your office to meet the customer and get them involved.

Introduce yourself to customers at the sales consultant's work area with the sales consultant present. Identify your role at the dealership and describe the process that is about to take place. Review the sales figures. Your customers will appreciate knowing that a change of face does not mean a change in the numbers. And it will set the stage for full disclosure.

Remember, no one will want to do business with you until they believe you care about what is important to them, and we will address the critical action of Building Rapport in the next installement of "12 Steps to F&I Succe$$". Until then, make your meetings matter!

SIDEBAR: Sample Introduction

Hello. Please allow me to introduce myself. I am ___________, one of the business managers here at the dealership. Congratulations on your purchase. Thank you for choosing us.

Together, you and I will be completing the title work and finalizing all the funding details for your new vehicle.

Before I verify the computer entries, I would like to review the sales figures with you. According to my instructions, both you and the sales manager have agreed upon a sales price of $________ [use small numbers and avoid the word 'thousands'], and we are paying $_____ [use large numbers such as one thousand five hundred dollars] for the trade-in vehicle. I will be collecting $_______ [use small numbers] as an initial payment, and we have an estimated pay off of $_________ for the trade-in vehicle. You spoke about finance terms of ______ months at _______ APR which is $______ per month. Of course all terms are dependent upon final lender approval.

As I mentioned earlier, I need to verify the computer information and would like to invite you into my office while I complete the data entry. It should only take a few minutes. My office is [down the hall/around the corner/up the stairs, etc].

Part 2: Build Rapport

A primary key to your F&I success is your ability to make a connection with your customers. Finding this common ground is easy for some and a real challenge for others. Many industry educators rely upon scripts to teach rapport-building skills. I choose to rely upon principles. When we learn principles and take ownership of them we internalize the concepts and have the ability to apply them in most situations.

Principle #1: Project Yourself Through Your Greeting

Think about all the ways you glean information about your customers. The credit application, trade appraisal, deal worksheet and sales representative's comments all help you know how to negotiate with each of your customers. What does the customer have at their disposal to learn about you?

Building rapport begins at the sales representative's desk. Your prompt arrival, your genuine smile, your firm handshake, your eye contact and your introduction all communicate that you are someone your customer can count on to understand and meet their needs.

Principle #2: Listen to Relate

People usually like talking about themselves. When you encourage them to share information you are well on the way to gaining their trust.

If you listen well, they will tell you how to tailor your presentation so that it will be easy for them to do business with you.

Principle #3: Mirror Your Message

Most people like doing business with people like themselves. If your customer likes sports, you should like sports but a little bit less than the customer does. If they like gardening, you should do a little gardening, but not quite as well as your customer. You get the idea. Reflecting the customer's interests creates common ground and paves the way for successful negotiations.

On the other hand, I recently saw and F&I manager wearing a presidential Rolex at work. What message does this send to his customers? Could they believe he is making too much money at their expense? While there is a time and place for jewels, I am not sure the dealership is the right space to display such extravagance — especially when your customers are considering payments in the $500-%1,200 range.

Principle #4: Engage with Your Environment

Your office can also help you gain accord with your customer. While it needs to be neither large nor new, your office should be clean, neat and organized for your presentation. People do not like dealing with someone who appears unprepared and is constantly looking for something they misplaced.

Treat your customers as if they were visiting you in your home. When your office environment makes your customer feel comfortable, they will relax enough to share their wants, concerns, and fears.

Principle #5: Connect Your Customer's Choices

The F&I process is a process of choice. And all of the choices belong to the customers. Since friends like doing business with friends, the choices your customers make will correlate to your success in learning and applying the principles of building rapport.

The more connections you make with your customer, the better prepared you will be to practice your FORM — the next step in the F&I process.

Part 3: Interview for Product Cues

Building a Case for Protection

For those general managers who do not believe that it is important for F&I managers to interview customers, let me point out that the F&I process is critical to any deal. The F&I manager not only discloses all the sales figures to the customer, but is also the last dealership representative to spend a significant amount of time with the customer.

A positive relationship with the customer is essential for both F&I productivity and future business opportunities. People buy from people they like and trust. Sales consultants spend a considerable amount of time to sell themselves, the dealership, and the vehicles. Through interviews, F&I managers show customers how to protect their future repair bills and good credit standing and how to maintain high resale value for their vehicle purchases.

Walk the Talk

The F&I manager has only 20 "prime" minutes from the time a customer walks through the threshold of the F&I office in which to present product solutions, address concerns, and close the sale.

Every word, every effort must be purposeful. There is no time to waste. So start the interview during the walk between the sales work station and the F&I office.

The Interview is All About the Customer

F&I managers, just like their sales colleagues, must learn about the customer's Family, Occupation and Recreation before delivering their Message. Good FORM focuses on customer needs and targets products as solutions to those needs.

Let's consider some typical inquiries for fiber guard products and how to use the information to present product solutions and close the sale.

Who is the primary driver of the new vehicle? It may be a spouse who needs a vehicle to drive the children to sporting events. Do they take other children with them? Do they frequent fast food places? Which is their favorite? Catsup, soda and coffee stains do not increase the resale value of a trade-in. Is there a baby in the crowd? Babies come with bottles of milk, juice, and all kinds of Oops! These customers may value extra cup holders and a fiber guard solution.

What if the customer does not have children and never frequents fast food establishments? What is their favorite restaurant? Do they bring home leftovers? Foil wrapped swans may look fancy, but they can also leak. The memory of the Steak Diane could last long after the calories are burned off. Fiber guard protects resale value and preserves pride of ownership.

Does your customer own a pet? While a dog is certainly a "member of the family" and excellent company, they can be "ruff" on automobile interiors. Fiber guard will protect the seats and carpeting from stains that go with the territory.

F&I producers will have better success when they can relate the use of F&I products and services to their customers' everyday activities. The interview yields these details.

Your Interview IQ

Do a post-play analysis on your last few deals. What happened in the interviews? Did you make every sale? What key points did you miss?

In the F&I office there is a 100 percent closing ratio: Someone sells somebody on every deal. Either you sell the customer or the customer sells you. Nearly every missed sale can be traced to an error or omission in the interview.

The more you know about the customer, the more on target your presentation can be. The interview helps you press the right "buying button", such as Security, Peace of Mind, Affordability, Convenience, Ease of Ownership, and Dependability. We'll work on your Product Presentation in Step 4.

Part 4: The Presentation

On your mark . . .

You have built rapport with your customer and earned their trust. You have identified their concerns and what they are looking for in your services: security, peace of mind, affordability, convenience, ease of ownership or dependability. You are prepared to use the information you gleaned from the interview to present your products and services.

Get set . . .

What are your opportunities? An opportunity exists when your products and services satisfy a need, want, or desire of the customer. Identify your opportunities before you begin your presentation. When you do this, your presentation will be on target. Near misses do not secure commitments.

Go!

Present solutions rather than doom and gloom. People buy solutions. They do not buy to save money; they buy to protect what they currently have.

Packaging your Presentation

Think benefits before bucks! Present all your products at once and talk money only after identifying what your products will do for the customer. Each time you discuss dollars before describing the benefits of a product, you lose gross profit. When the value of an item is not fully realized all that is left is price.

For example, if someone described a service agreement as a piece of paper that pays for covered parts and cost $1995, would you want one? Of course not! But this description, and worse, is heard every day. When customers back up, F&I practitioners feel pressured to take short cuts. They cut their presentation to the bare minimum, producing minimum results while processing lots of paper in a short period of time.

View the presentation as the F&I version of the demo ride. Create a vision of the customer and his family traveling somewhere. They may require mechanical assistance; they may need to spend the night. Labor rates may not be as low as they are at home. Wouldn't the family be better protected with a service agreement that has an 800 number so that they are never far from assistance? Should the repair require overnight work and they are miles from home they will be protected by trip interruption. Wouldn't it be easier on the holiday budget to simply sign their name to a repair order and not have to worry about the cost of repairs? Which deductible would they rather have: $50 or $0?

Presenting by the Book

What tools are you using during your presentation? Do you have a presentation book? If not, get one. Proof statements, thank-you notes, and testimonials from customers are priceless aids when presenting your products and services.

No one likes to enter an office where brochures are lined up next to the computer. This places the customer on guard from the beginning. Instead, place the brochures in top loading pages in the presentation book so that you control when the customer views the material and stay focused on the job at hand.

Presenting benefits should not entail misrepresenting them. Be careful not to oversell policies. I like to refer to a service agreement as major medical coverage for a vehicle. It does not cover everything, nor is it meant to. Just as health insurance does not cover 100% of our doctor bills, neither does a service agreement provide "bumper-to bumper" coverage. We all have a co-pay of some sort, whether it is for medical or vehicle repair.

Using F-A-B Skills

The customer sitting across from you while you are presenting has a flashing sign on their forehead that reads "What's in it for me?" Until you answer that question, you're just wasting their time. Use your F-A-B skills to build value. A Feature is a characteristic of your product. The Advantage is why your customer needs this product. The Benefit is what the product will do for the customer. Follow up the F-A-B with a tie-down question such as, "That is important to you, isn't it?"

Practice Makes Perfect

Here are F-A-B samples for service agreement and credit life policies:

· Your service agreement pays 100 percent parts and labor so that you do not have to create a separate repair budget, which means increased financial security for you and your family. That is important to you, isn't it?

· Your touring holidays will be worry free because your service agreement has a help line 800 number so that you are never away from assistance, which means increased peace of mind for you and your family. That is important to you, isn't it?

· In the event of your untimely demise, your credit life protection will pay off the loan on this vehicle, turning an obligation into an asset for your loved ones. I am sure you agree that no debt should live longer than its maker, should it?

Write down a list of ten F-A-B examples for each product you present. Practice your presentation 21 times in a mirror. Then videotape your practice. Watch your body language. Are your actions matching your words? Are you sending a clear and enthusiastic message? Practice your F-A-Bs until you are comfortable with the flow — this may take a little more time than you think! But perfect practice yields perfect results.

Next time we'll review some rules of negotiation and how they apply to F&I.

Part 5: Negotiate the Plan

You've completed your presentation. You secured the "7 little yeses"—affirmations that the benefits of the protection you described are indeed the benefits the customer wants to protect her new acquisition. Now you ask, "Aren't these the types of benefits you want to protect your new vehicle?" And your customer replies, "What are my payments?"

That's when you use the 12 key points for negotiating the plan:

1. The seller, not the buyer, sets the price. If you presented the value of the policies, you don't have to hide the retail price you specify.

2. You have more than money to negotiate. You have benefits, terms, coverage and deductibles. Your policies can be tailored to meet almost any customer need.

3. Customers need to perceive themselves as victorious. In truly great negotiations, all parties win. Egos can be both fragile and fractious. Give your customers (and yourself) some wiggle room.

4. Isolate the customer's concern and make it specific. Then restate the concern as a positive requirement. Perhaps the customer plans to pay cash to avoid writing monthly checks. With the current low rates, does it make sense for customers to use their own money to pay for a vehicle when they can retain a cash cushion and make automatic payments?

5. Assume the power to ask. Many finance representatives do a great job of explaining the policies and then forget to ask for the business. Your customers must say yes; you can't assume they are going to buy. Enter every deal with a positive mental attitude, approach the presentation from the customer's point of view, and stay alert for buying signals. When you believe the customer's concerns are answered, ask for the business. Then be silent and wait for the customer's response.

6. Customers recall the last words spoken. Your last words are often the difference between success and a missed opportunity. Here's a short story to illustrate.

A customer was contemplating the need for credit insurance. The finance manager asked, "Would this payment be a burden to the family if your paycheck was lost due to illness, injury or in the event of your passing?" The customer looked at his wife and replied, "Why yes it would." The financial representative then asked, "Can you afford not to have this coverage?" The customers again looked at each other and, after what seemed like an eternity, declared that they wanted to include the credit insurance with the loan.

7. Remember that everything is relative. The money spent on an Acura is just as important as the money spent on a Honda or a Bentley. Regardless of financial demographics, customers want value for the dollars they spend. No one wants to spend money needlessly.

8. Establish the negotiation zone. This is the difference between the base payment and the payment with the protection the customer desires. Talk difference, and use the power of small numbers. Which sounds better—$40 a month or $9.30 a week? They're equal. Sowing smaller numbers will reap larger dividends.

9. Parlay the power of the pen. Present every solution for your customer in writing. People retain 55 percent of what they see, 38 percent of what they hear and 7 percent of actual facts. When you talk and write you can use 93 percent of a customer's concentration and cover a lot of material in a short amount of time.

10. Use your time wisely. The longer your process takes, the lower your CSI rating will probably be. The ideal time is 45 minutes from hello to thank you.

11. Practice the power of par. F&I is a sales position and every sales professional takes the time to learn about products and track productivity in order to build confidence in presentation skills. Scoring against par keeps you from floating on a sea of excuses and holds you accountable for your actions.

12. Apply the 300 percent rule of negotiation. Use 100 percent of the rules 100 percent of the time with 100 percent of your customers. You'll be ready for step six—closing the deal with a menu!

Part 6: Close the Deal With a Menu

Menus don't sell products — people do. But effectively using them as a tool during the deal will ensure more sales and full disclosure.

Think about driving by a fast-food restaurant. The aroma of burgers lingers in the air. Your senses tell your tummy a burger would satisfy your hunger. You go with fast food because you don't have much time. You need to be somewhere in 10 minutes. With time restrictions in mind, you stop, park your car, enter the lobby and approach a smiling young clerk who immediately says, "I can help you!" So you look at the menu and ask for a number four with a diet soda.

Now, did the menu you were looking at actually sell you the burger, fries and diet soda? I think not. The aroma tickling your senses created the need. The thought process began before you pulled into the parking lot.

Use the Menu to Show Value

The same is true in the F&I office — the menu doesn't sell anything to the customer. The menu doesn't provide solutions. What the menu does is package the options available to the customer.

Back at the burger place, if you had purchased a burger and a soda separately or à la carte, you would likely have spent more than you did on the number-four "package." Maybe that's why the term "value" often precedes "menu."

However, the menu itself doesn't build value. Value in a product or service is created and sustained through communication of one person's need and another person's solution.

Be sure to establish value before you introduce cost. Is a price valid if the product doesn't meet the customer's needs? I think not. The price means nothing because the customer won't pay for a product that doesn't meet his or her needs.

Use Each Component of the Menu

Menus should identify the vehicle's selling price, any down payment, trade allowance and payoff. Payments must be quoted with terms and APR used to calculate the payment. The payment must not include any F&I products or services unless the retail amounts of the additional items are clearly identified and listed as optional. The customer has a right to know what the base payment is without any additional products or services. (Some states also require that retail prices of all F&I products are identified on the menu, in addition to the monthly payment.)

Use the Menu to Summarize

Menus let the presenter show the customer the most popular product groupings in the shortest amount of time. Customers all have some place they must be in 10 minutes! Time is your number-one obstacle.

If you use the F-A-B (Features-Advantages-Benefits) outline to present the value of the products to customers and obtain the seven little "yeses" throughout the presentation, the only step that remains is to answer customers' concerns and ask them to select the plan that fits their needs and budget.

Using the menu as a summary of benefits — the first step in full disclosure — avoids the possibility of failing to offer everything to everyone. Fatigue makes cowards of us all. When the hour grows late and the lights are casting shadows we all want to use the shortest path to get home. Often the shortest path is to shortcut the presentation. Unfortunately, the quickest trip home can be the longest way to meeting your sales goals, since people don't buy what they don't know about.

Use the Menu to Let the Customer Choose

The professional finance manager acknowledges the nature of his clients. The marketplace is composed of informed buyers who, courtesy of the media, have at least one side of the F&I story. It's your responsibility to introduce customers to the rest of the story so they can make an informed choice.

Your customers want choices. They want to be in control. They want to save face. If they begin with a negative response and you make a case that leads them to purchase, they don't want to be insulted along the way.

When you use a menu, your presentations and closings will be more consistent.

Make the Menu Part of Your Process

Reevaluate your F&I process. The sooner you can get customers into the F&I office, the more receptive they will be to listening to the options for customizing the vehicle and loan.

Simply put, one size does not fit all. Each customer is different; each customer has a different set of needs. Each customer wants to feel special. When you can tailor your products and services to meet a customer's needs, your deals will succeed.

Part 7: Document the Sale

Organization and disclosure are essential when paperwork can make or break a deal.

Paperwork occupies about 80 percent of an F&I manager's day. CSI scores and bounced contracts bear witness to the fact that few managers enjoy the paper part of their job. However, the last statement in the F&I prime directive is to complete all legal documentation for a transaction, so let's get started on the paper trail.

There's a Method to the Madness

Documentation begins with the sales manager's deal structure sheet, when management authorizes the deal and sends it to the financial center for processing. Since different lenders have different advance guidelines that yield different advances, structure the deal with a particular lender in mind and make sure the sales manager communicates this information to the financial center.

If your store uses a system in which payments are discussed before the customer meets with the F&I representative, your sales managers should have a copy of lender buy rate notices and they should know how to read credit bureaus beyond the credit score line.

If your store's system requires the sales department to treat every sale as a cash deal and secure the sale on a difference figure, it is the F&I representative's responsibility to secure the financing, obtain the credit application, and then present the products. (While many dealerships use this system, they may not factor in the extra time it adds to the F&I process.)

Divide & Conquer

Many stores choose to implement a two-visit process. The first visit is used to secure the sale, sell the financing, obtain the credit application, receipt the deposit and complete the purchase order. In the first visit, the product presentation is limited to anything that may need to be physically added to the vehicle, such as protective coatings. Other insurance products such as service contracts, credit insurance and GAP protection are reserved for the actual contracting appointment or financial delivery.

During the financial delivery, many of you have been counseled to prepare the title documentation ahead of time and to get the customer signing right away. A word of caution here: A recent 60 Minutes exposé suggested that this practice indicates a system designed to get the customer into a signing mode and minimize the time for contract disclosures.

A better practice is to have the contract sitting in the printer when the customer comes into the office. After you secure commitment on a plan that fits both the customer's needs and budget, you are ready to type the contract. Pull it out of the printer, separate the customer's copy of the contract from the original and place both copies side by side on a cleared desk and proceed to disclose the entire document. Full disclosure also requires that you explain the signature sections as opposed to just using a highlighter on them.

Make a List and Check it Twice

The balance of the documentation will be easy. It will work best to group the documents:

· Paperwork for the trade vehicle, signed in succession

· Title work for the purchased vehicle

· Receipt of initial deposit (down payment)

· Policies and products purchased by the customer

· Internal documents such as "due bills" (You might refer to these as "we owes" or "adds and removals")

Before you page the sales consultant, take a moment and compare your pile of signed documents with a checklist. A few extra seconds now can prevent funding delays and poor CSI marks as a result of inconveniencing the customer.

Tracking Turndowns

In an age of discrimination lawsuits, it is critical that the dealership can prove that every customer had the opportunity to purchase the extra services and protections available to them at the point of delivery. If the deal file does not have a policy or form showing purchase of an F&I center's product or service, the file should contain a signed "Customer Declination" form.

Bring out the form and fully disclose the item in a non-threatening manner. This step merely provides an audit trail should the dealership need it later.

Getting It Straight

A new F&I representative should read the front and back of every deal document to have a clear understanding of what it is and what it does. If you have questions, ask. If you miss a signature, get the customer back in sooner rather than later. When dealership office personnel ask you for a missing document, deliver it. When it comes to documentation, the longer it takes, the less urgent is seems and the more penalties there may be at stake.

Part 8: Secure the Funding

It's a terrible feeling when you've put great effort into a deal only to see it go splat because you can't get the customer's loan approved. Don't let this happen to you.

A deal is only as good as the ability to secure the funding. When loan packages reach lenders after the approval period has expired or arrive with missing documentation, the dealership loses cash flow and sometimes even the loan approval!

Lenders enter into dealership agreements on good faith, relying on the dealership to accurately represent the customer, the deal structure and the vehicle.

The best way to ensure that your deals are funded is to use the lender's guidelines, get the details right the first time and follow the documents all the way to the deposit into the dealership's bank account.

Credit the Source

Lenders can access all three major credit bureaus. They will run the bureau that is most prevalent in the customer's area. For example, a lender will most likely pull a TransUnion bureau for a Texas customer, while the same lender may pull an Experian credit bureau for a customer residing on the West Coast. When the finance representative looks at the same bureau information, it not only makes the credit interview easier, it also prepares the representative to answer the lender's questions about the customer's past credit difficulties.

I am frequently asked if the dealership has the right to show the customer the credit bureau. My answer is no. The practice of showing the credit bureau violates the dealership's subscriber agreement with the credit bureau, which stipulates that the dealership has the right to share only the information the dealership can enter into the credit bureau system: name, address and social security number. It would be wise for you to verify your subscriber agreements with your dealership's legal counsel.

Give Credit Where Credit Is Due

The best way to begin a credit interview is to put your customer in a non- confrontational environment. Introduce yourself as the one in the dealership who works with lenders to secure loan approvals. Ask for permission to discuss past credit items. Then you can safely say, "During my preliminary credit review, I noticed some credit difficulties (or glitches, hiccups, challenges — choose the word you think the customer will be most comfortable with). What happened during this time period?" Take notes, but don't show the credit bureau to the customer.

When you review credit information with the customer, ask for a recent pay stub to verify stated employment income. When the credit FICO score is low, lenders almost always want verification of income.

Verify the length of residency. Have they been in their house for two or more years? What was their previous address?

Are references listed on the credit application? A lender wants to know where the customer can go when times are tough. Where can the lender find the vehicle?

Document the Deal

The lender's guidelines are the F&I department's best friend. A properly structured deal will get approved much faster than one that seeks an exception to the guidelines.

Use a loan document checklist, and check it twice. Documentation is the key to securing rapid funding. Most lenders will provide a list for you.

Pull the deal apart and separate the loan documentation from the accounting office package. Make it easy for the accounting office to pull the funding package to verify the invoice and add on items to obtain the loan assignment.

Track the loan package. Whether it goes UPS, FedEx, Airborne, messenger, U.S. mail or by e-contract, the funding will most likely return the same way you sent the loan package. Perhaps your dealership can simply fax loan documents to the lender, followed by automatic deposit funding. Regardless of the delivery method, you must track the loan documents to their destination and the funding into the dealership.

Make It a Happy Ending

Again, a deal is only as good as the ability to secure the funding. And secured funding is verifiable; this will be our subject in Part 9.

Part 9: Verify Funding

The deal isn't complete until the funds are in the bank. While the process may vary among dealerships, F&I is really the best place to begin when we are discussing cash flow. The speed of the funding is critical for maximum cash flow.

Many dealerships have the accounting staff prepare and process the loan packages. This action may actually cause the dealership to lose days in funding. When the clock strikes 5 p.m., the office personnel depart. If the contracts aren't pulled apart they wait in a drawer until another day. Documents can get misplaced, or they simply may not be submitted with the funding documents. While this is not the case with every dealership, it is the case with many.

Get Required Documentation Early

A list of outstanding funds usually comes from the office manager on a weekly basis. The contracts-in-transit report should be printed from the F&I computer and verified by the office manager. The contracts-pending report lists every deal that has been worked by the sales manager that includes outstanding funds or an outstanding title for the trade.

When funding occurs, the F&I manager will close out the deal in the computer. The report will itemize the "who," "what" and "where" of the deal: Who bought the vehicle, what vehicle was purchased, what is owed and where the deal is pending.

For those deals that have less than optimal credit scores, getting required documentation early on is the key to fast funding. In many cases the lender of nonprime paper won't fund the loan until the lender has spoken to the customer to verify the credit application and the vehicle. Accurate and complete information is therefore critical.

Use Technology to Speed Up Process

F&I staff should be directly responsible for preparing the loan package and tracking the method of delivery to the lender. And, using technology can make funding occur almost at the speed of light.

Using DealerTrack, Curomax (in Canada) or other auto finance portals, the F&I department can employ the Web to secure loan approvals and obtain the funding status of contracts. Chase and Wells Fargo now utilize e-contracts.

Many lenders will fund the loan after faxing the loan documents to the funding department. Lenders will generally allow 10 days for the actual loan documents to arrive in their offices.

Track Loan Documents Through Funding Process

In the nonprime market, many dealerships claim that lenders use any reason to increase their float on the dealership's funds. In reality, this problem occurs when the dealership's personnel don't phone the lender to verify receipt of all the loan documents and the additional documentation. Requiring F&I staff to track the loan documents through the funding process can eliminate lender float and increase the dealership's cash flow.

If you aren't using technology, you are behind the power curve and your cash position could be suffering because of it. DealerTrack and Curomax cost the dealership nothing, and the benefits are exponential. All you need is access to the Web to begin experiencing faster approvals and faster funding.

E-contracting is the future and the e-process will enhance business-to-business transactions. You'll be able to fund a contract within minutes of obtaining a customer's authorization and register a service agreement on the same day you deliver the vehicle. All this technology adds up to increased customer satisfaction, increased cash flow and increased efficiency. It's a verifiable win-win for everyone.

Jan Kelly is president of Kelly Enterprises. She is a sales trainer and consultant, convention speaker and frequent contributor to industry publications. For information about training opportunities call (800) 336-4275 or visit her Web site at www.JLKelly.com.