5 F&I Myths You Should Think About
By George Angus
In developing successful F&I processes, it is important to identify the most effective techniques and procedures.
However, it is also just as important to identify common beliefs and tactics that are proven, through research and process
development studies to be counterproductive. There are some commonly held beliefs that have been weaved into the
“conventional wisdom” of F&I training and are constantly passed along by old timers and even F&I schools. We seem to
encounter them on a daily basis while working in the field with F&I Departments in the U.S. and Canada. Our research
team has identified some of the myths we encounter frequently and they are shared below. Back in 1992 when we
developed the first F&I menus, we traced the roots of every F&I school back to the old World Service Life Insurance
School of 1965. All of the F&I training since then has incorporated many of those old ideas. Here are some of those
accepted ideas that research has proven wrong:
1. Value Presentation- The conventional wisdom in F&I schools since the 1960’s has come down to one basic
premise. That is “If you are strong enough in your presentation to create enough value in the customer’s mind, they will
buy all of your F&I products”. This is the concept we have the most difficulty in changing. I first introduced the F&I Menu
concept to most of the current group of F&I Menu trainers in the marketplace at one time or another since 1993, yet, this
is the one area I have to constantly remind them about. Maybe it’s because the idea makes sense to sales minded
people. It’s how we sell a car, right? Point out the feature, describe the benefit, justify the price, sell the car. That’s how
you sell a big ticket tangible product. That’s fine, except when you move into the F&I office you are dealing with an
entirely different kind of product; intangibles. Credit life, A&H, service contracts, GAP, etc., are all fear of loss or security
products. In the customer’s mind, value has nothing to do with their decision to buy these products. They choose them
based upon an unconsciously triggered “psycho-neuro” response to a security based or “love” centered reaction. This is
complicated stuff and the F&I process needs to incorporate the proper science to create top F&I performance results.
The other issue is time. We measured the time it took to do a proper value presentation, using the feature-benefit
presentation taught at a few F&I schools and the average time it took to present all the F&I products was over 20
minutes. Anybody who’s ever actually done F&I knows that is too long to keep the customer’s attention. (We’ve measured
effective receptive time at 4 ½ to 7 minutes, no longer). What we see when this “value” idea is adopted is the sale of
mostly service contracts, (hammer, hammer), and not much else. The F&I managers do their best but never reach top
income and penetration levels.
2. The Interview- We don’t know who thought this one up in the first place but they didn’t do any research or field
testing. Many F&I managers have been taught to begin the F&I process with a set of questions designed to find out the
individual customer’s situation and needs. This supposedly helps the F&I manager “qualify” and determine which
products best fit the needs of that particular customer. Sounds reasonable, right? The problem is that in practical
application, what goes on in the customer’s mind during this question and answer period creates a tremendous amount
of negative sales resistance. The customers have even expressed marked resentment to it in our surveys. Think about it.
“How long do you intend to keep this car? How many miles are you going to drive it? Who will you rely on to take care of
your payments in the event of your untimely death”? Why is this any of your business, other than to tip off the customer
that you’re setting them up to sell them something? And it’s also a waste of the receptive first 4-7 minutes. You might as
well ask them “How often do you and your wife make love”? You’ll do just about as well.
3. Overcoming Objections- In the field, we keep running into these objection handling brochures that give a list of
objections that the customer might have and the answers to overcoming the objection. The idea seems to be that if you
win the argument, prove the customer wrong, they will react positively and buy your products. Nonsense. This is a really
old idea that may have worked 40 years ago, but it certainly doesn’t’ work with today’s customer. First, top performers
know that the customer should never be in a psychological state that makes them feel they have to rationalize or justify to
the F&I manager their reasons for buying or not buying a product. If that is the mood of the interaction, you’ve already
got problems. Second, the effective F&I process easily accepts and builds in objections as opportunities to offer
alternatives. Not arguments.
4. All You Need Is A Menu- While introducing the first menus to the marketplace in the early ‘90’s, we learned very
quickly that there was a lot more to the process of installing a menu system than giving the F&I managers a piece of
paper. From our first 4 column menus and through the 36 revisions to the Package Option™ Method we now use, the
key to menu success and top performing processes had to do with precision, effective training, and F&I managers who
understood and bought into scientific, cutting edge advancements in process and procedure. Creating a top performing
F&I department is science, not theory. A menu is just a piece of paper until the best, most effective, process is
professionally applied. Handing a scalpel to an untrained person doesn’t make them a surgeon.
5. Weak and Strong- This is an ego business. Almost every F&I manager came from the sales department. In sales,
you sell a car for a great big giant gross, you are strong. You let a customer go home and “sleep on it” and they end up
buying somewhere else, you were weak. We need an ego and self esteem in this business. However, when you move
into the F&I office things change. Our F&I process got a lot of attention this year because we have the overwhelming
majority of the top F&I departments in the country using our process and training, but that is only because of research
and process development in the field. Our process didn’t produce those top performers; those top performers produced
our process. Top F&I performers are not slick, flashy, egotistical, or full of themselves. They are professional managers
who adopt and execute a proven process on a consistent basis. Scoring in the top 100 F&I departments in the country,
now that’s strong.
George Angus is with Team One Research and Training, a research and training company that specializes in scientific,
research based program development and training programs for the automobile industry. Team One can be reached at
1-800-928-1923 or on the web at www.teamonegroup.com
George Angus has had over 100 articles published in news and trade publications. This
article is a recent example of George's reporting of information derived from researching,
training, and working with the leading F&I managers in the US and Canada.