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ADI Forges Partnership with Famed F&I Trainer Becky Chernek

ADI Forges Partnership with Famed F&I Trainer Becky Chernek

F&I Integration: A Dream Team Philosophy


Rebecca Chernek

The history of retail automotive sales is a fascinating story in and of itself, but even more interesting is the evolving of product offerings to customers through a dealership’s finance and insurance department. The industry attributes Patrick Ryan as being the pioneer who first introduced the concept of finance and insurance as a profit center for dealers back in 1964. The paradigm was so well received, his dealership soon went national and then his company acquired and merged with several others, as Ryan introduced training and menu selling as the next models for revolutionary growth in every dealership’s F&I department. Now, Ryan’s company-RDG-is well known nationwide, to those in the automotive industry.

Although financing terms were limited in those first years, other dealers immediately saw the advantage of delivering a unit at the time of sale and increasing profits through the sale of insurance products. Their customers saw the benefit of utilizing dealership financing, rather than paying cash, and then protecting their investment through the purchase of other available options, such as credit disability and service contracts. It made sense to have a business center that would offer these services to them in one easy transaction and save them from having to deal with several sources. Several of the larger dealerships joined Ryan in offering financing.

By the late 1970s, when interest rates rose to nearly 18-percent and vehicle sales came to a standstill, hundreds of dealerships were desperate to adopt any new policy that promised enough profit for them to stay in business. It was in 1979 that General Motors Acceptance Corporation initiated a policy of financing car loans at 12-percent. Soon, a number of credit unions and small banks joined them in this new service, and financing and insuring automobiles at the dealership became the industry standard. Within the next few years, discounting was a customary part of the process; dealers offered customers loans at 10-percent, secured financing from a bank or other lending source for 8-percent, and kept the difference as a means for growing profits.

By the mid-eighties, 48 and 60-month financing terms were commonplace. Then, in 1986, dealerships introduced leasing as another alternative to buying a new vehicle. Customers realized they could pay for the car of their dreams with an affordable monthly payment and not have to come up with cash. Sales in dealerships nationwide increased substantially. The finance and insurance profit center was, once again, taking another leap out of the Dark Ages.

While most dealers utilized financing as a way to build on their customer base and loyalty, and utilized the convenient offering of suitable products as a way to serve them and increase company profits at the same time, others were mismanaging the finance center. They saw the system as a way to close customers on their vehicle of choice and then upsell products afterwards. In fact, many training companies actually taught that it was advantageous to escort customers into finance. It was up to the F&I managers to discuss payments and, certainly, never to anyone from the sales department. Those in sales realized few of their customers would agree to an upfront payment anyway, so there was no logical reason to not let the finance manager provide the facts of life. Perhaps this is where of the often quoted, “Stick ’em in the box!” originated.

This system seemed to worked well, until customers started to spread horror stories of how these “greedy” finance officers-who were working on commission and, supposedly, with the full knowledge and support of their dealers-were taking advantage of their vulnerability. They were reaping untold profits at their expense. Customers started to shop for a better deal. They were tired of paying needlessly high interest rates and buying products they either didn’t know they had purchased or didn’t need or want. These practices came to a screaming halt by most scrupulous dealerships, with the passing of several federal and state laws and rulings regarding consumer protection. Compliance with these rulings became critical, if dealerships wanted to avoid litigation and a ruined local reputation.

Unfortunately, far too many finance managers are still locked into this old way of doing business. Some simply choose to ignore the compliance rulings and operate on a daily basis with a nervous bravado, hoping they won’t get “caught” by increasingly savvy customers, as they pack product sales into the vehicle contract, without the full knowledge and understanding of their customers. They are afraid any change they make to their “customary” way of doing business will affect their commissions. They are still operating in the every-man-for-himself mode, with subtle disregard for the dealer’ policies, the dealership’s reputation, or the sales department personnel, who are eager to make sales, too.

Disregard for compliance is risky business. Most customers have learned to use easily available online resources to shop for better deals and to learn how to protect themselves from unscrupulous selling activities. They come into the finance office understanding what is about to happen. Those who feel they have been “fleeced” are more apt to turn to litigation for satisfaction. More than ever before, managers need to know how to present product offerings in a forthright manner. Profits can be made through the proper use of menu selling. It takes training and an abrupt turnabout in attitude. It also takes uncommon cooperation from every member of the dealership, especially from those in sales and finance.

In other words, successful dealerships adopt a dream-team philosophy of sales and finance integration. And this philosophy is based on the Golden Rule: do for others as you would want them to do for you. What worked in the “old days,” to increase sales and profits, is no longer appropriate or beneficial to anyone. Dealership personnel must perform their respective roles in the same manner and with the same respect they would want when personally shopping for a vehicle. Mark Twain once said, ” “If you tell the truth, you don’t have to remember anything.” Truth sells cars and products. Truth sells in the increasingly competitive market.

Looking back to the 70s and 80s again, vehicles were selling for $7-10,000 and dealers made a significant profit on each sale. Today, however, few dealerships make any profit in the vehicle contract. There is too much competition in both models and brands offered, and automakers in Detroit are offering fewer incentives to dealers, while also working to downsize the number of dealerships nationwide. With incentives and sales down, and with dealerships under the threat of closing, profits must be made elsewhere. The selling of products and services has become a necessity.

So, how do dealerships profit in today’s marketplace, with consumers as educated as they are? It’s simple, really, and it goes back to basics. All managers, including those in both sales and finance, must work together, and they must engage customers the moment they enter the showroom or step onto the lot and immediately earn their trust and respect. We could call it “old times” service and “old times” values. This is accomplished through the understanding and well-practiced use of a seamless sales process. Customers must never sense they are working with two separate departments. Those in the sales department can no longer treat the finance department as their scapegoat to close the deal. They must work in unison and cooperation with those in the finance department. Those in the finance department must never discount the importance of the sales personnel. Teamwork. This is not a new or revolutionary idea.

“A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they are mutually accountable.” (Katzenbach and Smith, 1993) The common purpose is to grow the customer base and ultimate customer satisfaction, through the development and use of improved people and selling skills, thorough knowledge of vehicle advantages and performance, and through the sincere presentation of product and service benefits. The common purpose is to grow profits continually, through the mutual commitment and accountability of every member of the sales and finance department, by ensuring the total satisfaction of every single customer. Satisfied customers return for additional or replacement vehicles. Satisfied customers provide free advertising to family and friends. Satisfied customers provide product profits, because they have confidence that dealership personnel are “looking out for them” and are not out to take them to the cleaners.

Today’s sales managers take responsibility for closing the sale; they leave no stone unturned. They understand that if financing is an alternative option for their customers, they can no longer risk mismanagement of their transactions by ushering them into finance, without review. Sales management can no longer misguide customers through purposeful nondisclosure of the terms of the sale. They, and every other individual in the dealership, must act as one person with the same mission-to please customers, by treating them with dignity and respect, by being upfront about the entire process of selecting and closing on an appropriate vehicle. Most of all, every sales and finance staff must be able to ensure customers that the dealership cares and is on their side.

F&I integration is about sales and finance working as a team to sell more vehicles, while maximizing profits in both the front and the backend through the utilization of full compliance and customer confidence. F&I integration is about sales and finance working seamlessly together so that customers tell others about the joy of buying a vehicle with the assistance of a knowledgeable and caring “dream team.”

NOTE: Here an abbreviated history of Ryan’s company growth and contributions to the car industry. I felt the most important issues were treated appropriately in the brief history provided in the article.

1964 Patrick G. Ryan forms Pat Ryan & Associates, pioneers the sale of insurance products and warranties sold through automobile dealerships. Introduces the idea of a Finance and Insurance Profit Center .

1967 Pat Ryan and Associates becomes a national distribution organization,

1969 Ryan and Associates becomes National Alliance in alliance with Ford Motor Credit.

1971 Introduces participation programs through reinsurance

1978 Introduces first independent insured service contract program.

1982 Ryan and Associates becomes a subsidiary of Ryan Insurance Group, which merges with Combined International Corporation.

1987 RIG forms alliance with Chrysler Financial.

1992 RIG acquires Singer Group and Key Royal training companies.

1994 RIG expands training competencies to include fixed and variable operations.

1996 RIG becomes Resource Dealer Group

1998 RDG completes exclusive relationships with AutoNation and United Auto Group

1999 RDG introduces customer-centric, menu-based selling format

2000 RDG forms relationships with Sonic Automotive Group and Asbury Automotive Group

2001 Aon Warranty Group acquires First Extended Corporation.

2002 Resource Automotive name given to represent all of Aon Warranty Group’s automotive entities. Resource Automotive awarded largest retail training contract in Honda’s history

2003 Formation of Resource Automotive

2004 Introduction of ResourceVIP

2006 Launch of LUXCARE Aquisition by Onex, The Warranty Group is formed

Becky Chernek, president and founder of Chernek Consulting, LLC has enjoyed an exemplary sales career spanning almost two decades, and experienced every aspect of the car sales process. Over the last several years, Ms. Chernek has worked with hundreds of automotive dealerships on F&I Training and F&I OnLine Training including JM&A and AutoNation. For more information, call 404-276-4026 or visit

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