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www.BoatingIndustry.com 30 | Boating Industry | March 2015 Advice from leading dealers and providers on maximizing F&I BY JONATHAN SWEET i t can be one of the best ways to increase dealership profi ts, but a strong fi nance and insurance department isn't often top of mind for many dealers. But not putting the time and effort into your F&I department means you're leav- ing money on the table, says Mike Hoffman, owner of Marine Center of Indiana. Having a good F&I department is crucial to his dealership's success. It means more money for the dealership, more deals closed and a bet- ter customer experience, Hoffman said. From fi nancing to extended service plans and warranties to GAP insurance there's plenty of money to be made in F&I. The av- erage Top 100 dealer, for instance, has a 67.2 percent gross profi t margin on its F&I depart- ment, compared with 58.9 percent on service and 18.2 percent on boat sales. "It's all about taking care of the customer, and I make money at it," Hoffman said. To be truly successful, the F&I department has to be an integral part of the sales process. At Slalom Shop Boats & Yachts, even custom- ers that intend to pay cash will meet with busi- ness manager Nicole Haden. "Once the salesman has reached the point where they've agreed to a price, but before they take a deposit they bring me in," Haden said. "I take all money, run payments, talk about extended service, go through the process [and] still try to get them to fi nance with us." More than 60 percent of Slalom Shop's cus- tomers choose to fi nance through the dealer- ship, including many who originally intended to pay for it with other sources but saw the benefi ts of working through the dealership. Marine Center of Indiana takes a similar approach, with the F&I manager playing a crucial role in sales. "A boat isn't sold until it's paid for and fi nancing is a key component of that," Hoff- man said. "Even the guys that think they want to pay cash, we sit them down with the fi - nance manager to at least try to sell them an extended warranty." Marine Center of Indiana fi nances around 75 percent of purchases, with about 60 per- cent buying extended warranties, although that business has shrunk as manufacturers have increased factory warranties. Because Hoffman knows Marine Center of Indiana will make an average of $2,400 in the fi nance offi ce on each sale, he can then sell the boats for less. That's especially useful in boat show pricing, he said. "If I've got an entry-level boat and I want to really slim up the margin on it to get that customer interested, I can afford to do so," he said. "I realized that because we make so much on the back end of the deal, I can really drop my margins almost in half and come out with the same profi ts for the show." In-house or partnership A certain volume is necessary to make the numbers work for a full-time, in-house F&I person. With all of the regulations around fi nanc- ing having salespeople handle the process could lead to trouble with protecting cus- tomer info. (See related sidebar p. 31). It can also be diffi cult for someone to do the task as part of another job. One solution is a model like Marine Cen- ter of Indiana where it shares the F&I man- ager with a neighboring RV dealership to reduce costs and make sure there is enough work for him. There are also companies like Priority One and Blue Water Finance that coordinate F&I services for dealers. "We're set up so we handle all of their re- tail fi nancing needs from start to fi nish." said Scott Ward, president of Blue Water Finance and Brunswick Product Protection Corp. "We act as their F&I department. The way we work with them it feels like we're sitting Building a profi table F&I department © istock.com / franckreporter