how to become a finance manager at a car dealership

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A Career as an Automotive Dealership Finance Manager

The auto industry has experienced several good sales years in a row. According to the Detroit News, auto sales beat expectations in 2018. Originally, experts predicted that 2018 sales would be down significantly from 2017. However, the industry surprised everyone when sales numbers actually increased. The Detroit News reports that a total of 17.3 million vehicles were sold during 2018, up from only 17.1 million in 2017.

In most cases, car dealerships earn very little profit on the actual sale price of a vehicle. Fortunately, most people who purchase a vehicle are unable to pay the full price out-of-pocket and need a loan to make up the difference. Car dealerships rely on their finance managers to bring in these loans and boost their profits through interest. The more interest these loans produce, the more profitable the dealership will be.

F&I Managers Earn Over $100k/year!

Our 4-week F&I Training program gives you all the tools you need to become a highly paid F&I manager including job placement assistance with an over 90% job placement rate.Learn More

What Is a Car Dealership Finance Manager?

A car dealership finance manager is a finance professional responsible for helping customers obtain the financing they need to purchase the vehicle of their choice. Finance managers not only work directly with customers interested in a car loan, but they are also responsible for completing all of the required documentation for each financing transaction. Examples of duties performed by car dealership finance managers include completing applications, pulling credit scores, filling out sales contracts, determining payoff amounts and performing title checks. Car dealership finance managers also present and encourage the purchase of extra products sold by the dealership, such as vehicle purchase add-ons.

Each customer’s ability to obtain financing will depend on his or her likelihood of repayment as determined by income, credit score and other factors. In most cases, the finance manager works as an intermediary between finance companies and the car dealership. The finance manager’s ultimate goal in each transaction is to help the customer get the vehicle he or she desires while also maximizing profits for the dealership.

Car Dealership Finance Manager Responsibilities

With every new vehicle purchase, the car dealership has three separate chances to earn a profit, including on the trade-in of the customer’s old vehicle, on the purchase price of the new vehicle and in the financing process. The dealership’s sales team is responsible for the first two transaction, while the finance manager is responsible for the third transaction. However, both the sales team and the finance team often work together to make sure the deal is as profitable as possible for the dealership.

When purchasing a vehicle, customers can either choose to shop for a loan on their own or work with the dealership’s financing department. For the dealership, it is always better to convince the consumer to finance the purchase in-house. It is especially lucrative for the dealership when the customer has a suboptimal credit profile and is required to pay a higher interest rate.

In order to increase profitability for the dealership, finance managers may entice customers to purchase add-on products that raise their monthly payments. Examples of add-ons include paint protection, an extended service contract and gap insurance. Finance managers may also add to the interest rates quoted to them by lending partners, or they may encourage customers to take on a longer loan with a slightly higher interest rate. The latter strategy results in a lower monthly payment for the customer but an overall increase in profits for the dealership. Many dealerships offer their finance managers commission or other incentives for selling extra products or longer loans. According to Value Penguin, the typical term length for an auto loan in 2019 is 68 months.

How Much Do Finance Managers Make?

The salary of car dealership finance managers varies according to many different factors, including the location, the dealership’s profitability and the finance manager’s experience. According to the Bureau of Labor Statistics, loan officers working for automobile dealers in 2017 earned an average annual salary of $98,270. This works out to approximately $8,189 per month. Some states pay finance managers more than others, with the highest wages found in New York, Connecticut, Massachusetts and New Hampshire.

The salary received by car dealership finance managers varies by general region as well. For example, finance managers on the East Coast and West Coast earn higher wages, with lower wages found in the central part of the country. The lowest wages are found in the northwest part of the country, excluding coastal states.

In general, finance managers will earn more when they work in mass market dealerships. These dealerships work with a smaller profit margin on vehicle sales prices, which means they must make up more of their profits in the area of finance. This allows finance managers to ask for higher wages because they carry more of the responsibility for the dealership’s success. In addition, these dealerships often have the resources to pay higher salaries.

How Are Finance Managers Paid?

For decades, compensation for finance managers and other professionals in the automotive industry was based exclusively on commission. However, in the past few years, the compensation structure within the automotive industry has shifted to include a balance of base salary, commission and other incentives.

The shift to a more balanced compensation structure was not necessarily beneficial to finance managers at the time, as they actually earned more when they were paid in commission. However, finance managers also worked more hours when they worked for commission, and they were more vulnerable to the ups and downs within the auto industry. Today, finance managers enjoy a more comfortable schedule and better job security while still earning a healthy salary.

Getting a Job as an Auto Dealership Finance Manager

In general, someone hoping to be successful in this career needs to have skills that allow them to build rapport with customers and keep them happy throughout the loan application and execution process. Auto dealership finance managers must also be detail oriented so that they can be sure every transaction is as profitable as possible for the dealership. In addition, auto dealership finance managers need to have excellent decision-making skills so they can decide which loan options will be most lucrative for the dealership in each case and which approaches will work best with each individual client.

Most auto dealerships require finance managers to have at least a bachelor’s degree, along with an understanding of the financing process. Finance managers working for car dealerships usually complete on-the-job-training as well before beginning work. In the job market, the basic qualifications may not be sufficient. However, you can set yourself apart from the competition in several ways:

– Get some experience with car sales.

One of the best ways to improve your marketability as an auto dealership finance manager is to gain some experience in the car sales industry. For example, you may accept a sales position temporarily so you can learn more about how the sales process works.

– Work in banking.

If you can’t find a job as an auto dealership finance manager immediately, consider spending some time working in another financial institution, such as a bank. This will allow you to get a better understanding of the lending process, as well as some experience you can list on your resume to make yourself a better candidate when you apply for a job with a dealership.

– Obtain a certification from a certified F&I school with job placement assistance.

Some institutions offer specific certifications for Finance and Insurance Managers for Auto Dealerships. Obtaining this type of certification shows potential employers that you not only understand the basics of lending, but that you have training specific to the car sales industry. It is also highly beneficial if the school you attend offers a job placement assistance program. For example, here at ADI our students experience over 90% success rates when it comes to job placement within 90 days of completing our training.

If you are considering a career as an auto dealership finance manager, keep in mind that the industry is constantly changing. Skills, experience and professional training will help set you apart. For this reason, it is wise to do as much as you can to build your resume before you begin a career as a car dealership finance manager.

ost people find our company because they want to become an F&I Manager. In fact, we help hundreds of people become F&I managers every year.

In this article we will talk about how you can land an F&I Manager position too, and some tips and tricks to make the process easier.

With an average salary of over $130,000 per year, F&I Managers are among the highest-paid dealership employees. Like most careers with large salaries, it can be challenging to become an F&I Manager when you have no experience. So what can you do to give yourself the upper hand?

The most important steps that you can take to become an F&I Manager:

Generally speaking, dealerships are looking for candidates with a proven track record of strong performance in the F&I office. But consider this – Everyone, even the BEST finance managers to ever exist, had to start somewhere. 

1. Take an F&I Training course

Programs like Finance Manager Training offer an online F&I school where you can learn the in’s and out’s of the F&I trade and how to become an F&I Manager.

This is by far the quickest way to learn how to do the F&I job.

Tuition is only $297 per month and provides an F&I Certification Diploma that you can add to your resume and your desk. When it comes to applying for F&I Jobs, this education is the next-best-thing to being a current F&I Manager with a strong track record.

With easy-to-follow video lessons and quick informative reading modules (as well as access to F&I practice software) you can hone your F&I skills before you ever enter an F&I office.Learn More About F&I Training

This is a good option for salespeople and dealership employees that want to take the next step in their career.

Think about it this way: What says “I am ready to be promoted” more than taking the initiative and training for the job that you want to have? Nothing!

Finance Manager Training also offers Rapid/Expedited F&I Certifications, for those who want to earn their Certification more quickly!

2. Have stellar paperwork

Salespeople have a reputation for sloppy paperwork.  Make sure your deals are clean and have all the necessary documents ready for the finance office. An F&I Manager routinely juggles up to 10 deals at any one time and needs impeccable paperwork and organizational skills.

If your F&I Manager, General Manager or Sales Manager is consistently asking you for paperwork, you don’t have much luck in getting promoted.

3. Learn your dealerships F&I’s product offerings

Take an interest in the products that your dealership offers. You can even ask to go over them with your Finance Manager. With your manager’s permission, try your hand at selling a product or two during the test drive or pencil.

Showing that you can sell product while on the sales floor will show management that you are a true closer in multiple sections of the dealership.

4. Offer to be a fill-in

Once you have a reputation as a salesperson with strong paperwork and who can sell a product or two, you can offer to be a fill-in for when an F&I manager is sick or busy. This gives you access to further hone your skills. F&I Managers aren’t impervious to illness and vacation, so there will be times when the dealership may need you to fill in.

How much will I make as an F&I Manager?

The short answer: It depends. The long answer: The National Automotive Dealers Association ran a study a few years ago (2016). In it, they determined the average F&I Income to be approximately $132,786. Not bad!

Keep in mind, the average means just that. An average. Some will make more than that, and others will make less.

F&i manager salary how much do F&I managers make

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How to become an F&I Manager in more detail

Finance and Insurance (F&I) managers are one of the most valuable employees in a dealership.

Because of this, Dealerships don’t hire just anyone to take charge of their finance operation.

In most cases, an F&I manager starts as a salesperson and earns a promotion after a few years and a solid track record of sales success. In fact, an F&I manager is essentially a salesperson who deals with F&I products.

Getting into the nitty, gritty, we’ve laid out 10 tips for you on how to become an F&I manager.

Aim for proficiency

Hone your skill set by doing the absolute BEST you can do in every task. If your General Manager asks you to take out the trash, be the best trash-taker-outer he/she has ever seen. Go above and beyond in everything you do and do it all to perfection. Managers notice!

Be the best at customer service

Don’t be selective when it comes to helping customers. Treat customers with respect and courtesy at all times. It also helps to ensure that your customers are at ease, so they’re more likely to express their needs and you’ll be able to sell more efficiently. Facilitate an open dialogue with potential customers to know how you can assist them, and this will show others that you are a professional, not just another salesperson.

Learn from each other

Talk to the best performing employees in your dealership. Copy their best qualities, but keep your own spin on it (be yourself). Don’t assume you know it all, because we assure you, you don’t! Even take advantage of those boring manufacturer provider training videos. Training can equip you with the information you need to handle objections and other scenarios, so you can promote products without appearing too eager or pushy.

Maintain a professional persona

Dress well, talk appropriately and keep your sales talk about the issue at hand. Avoid engaging in controversial topics, such as politics. In the workplace and when dealing with customers, it’s best if you keep conversations light and professional. You should listen to what your customers have to say, but as much as possible, stay on topic and keep your focus on closing deals.

Enhance your listening skills

As a salesperson, understand the importance of checking in on your customers, even after the sale. Make sure that your customers are satisfied. You can also get important feedback on what you did right and wrong, not only in terms of products and services, but also your performance.

Post-sale follow-ups help you to establish a relationship with your clients that possibly extend beyond the first closed deal.

If you’re determined to climb the corporate ladder, you’ll probably spend many years navigating the same circle, and it’s helpful if your customers remember many good things about you. Remember, loyal customers will help you close more deals with positive feedback and word-of-mouth recommendations.

Be persistent

Modern F&I platforms allow customers to choose products they like, and make adjustments in terms of product options and payments.

Also, note that some products are known to require a lot of trial closes, so don’t give up if the deal isn’t closed with just one try. Be persistent and offer alternatives to effectively close the deal.

Learn more

You’re aiming for a highly competitive position, so you should be skilled at F&I processes and products. The more you learn and experience the processes, the more you will become familiar and adept.

Use competitive advantage

Don’t be afraid to be competitive. Set a goal and aim for it. Whether that’s selling 25 cars this month, or pre-selling half of your customers with vehicle service contracts before they enter the F&I office, make a goal and stick to it.

You may be shocked and what you can achieve.

Prepare for the responsibilities

F&I managers deal with various responsibilities. Some of their day-to-day activities include trying to complete deals, boosting profits, handling customer issues, and doing paperwork. F&I managers are also rated based on their average back-end profits. The job is extremely technical, and success relies on great salesmanship.

Overall, this position is rewarding—financially and professionally—but don’t expect things to be easy. In sales, success isn’t based on seniority. It’s not uncommon for young people to climb the ladder. But the job can be particularly tough if you’re new to it, so it pays to learn from your boss initially.

Take the leap

An F&I manager position isn’t up for grabs to those who simply decide that they want it.

Instead, the position is given to the company’s top sellers who have shown they have the training, desire and skills of the position.

With enough training, experience, and success in sales, you should take the leap once an F&I manager position becomes available.

In some cases, it’s easier to get promoted in the company where you started, but for other F&I managers, taking better offers and switching dealerships isn’t unheard of.

After a couple of years in the position, F&I managers rarely shift or go elsewhere because of the high financial rewards that their job provides.

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