Extending profitability

There are dealers across the country who sell themselves short when it comes to F&I. They find myriad excuses to complain away the reasons they don’t offer F&I services to their customers.

“Our typical customer does not finance the purchase,” they’ll tell you. Or, “Due to the demographics of our Cobalt buyer, we don’t see a whole lot of financing from them, and the boat comes standard with an extended warranty, so we don’t see that action either,” others have said.

At least one Cobalt dealer who doesn’t believe that hype has proven these excuses wrong. Seattle Boat Co. launched a full-time finance department in January 2006. And by all indications, it has been a successful venture.

The process that company president Alan Bohling instituted mandates that the sales person turns the customer over immediately upon receiving a deposit, and the F&I department takes it from there. And in just the first year of operation, Seattle Boat Co. has more than tripled its reserve income and net profit from extended warranty sales. Six percent of the company’s net profit was generated by this newly created F&I department.

The same extended warranties that one dealer passed off as not having a value, another dealer sold to greatly increase his profitability. Those types of results just go to show you that no matter what you believe your customers want, asking them will always get you a better answer. And in this case, a better bottom line.