How one Nissan dealership enhances F&I profits

Tony Provost, president of Nissan of Bourne (Mass.), says his dealership earns F&I gross profits of around $1,400 per car, well above the average of around $1,000 generated by the big publicly traded dealership groups. The difference is F&I product sales, he said.

Dealerships better get used to being paid a flat fee, he said in a recent interview. That probably represents less gross profit per loan, instead of the traditional setup, where the dealership in effect marks up the customer's interest rate.

With less money coming from interest rate markups, he said dealerships need to make up for it by selling more F&I products, such as extended service contracts, guaranteed asset protection and policies covering such things as fabrics, finish, wheels and tires.

In a Dec. 14 phone interview by Special Correspondent Jim Henry, Provost offered some tips.

• All F&I managers should buy their own F&I products for their own personal vehicles. Provost said sales ultimately went way up for one F&I manager who complained at first about the policy. “She complained, ‘This is going to cost me $80 a month!' And I said, ‘Yeah, but it's going to put an extra $1,000 a month in your pocket.' ” Buying products themselves helps F&I managers learn the product features. It also makes F&I managers more credible when they advocate F&I products for customers. As a customer, an F&I manager also experiences the benefits of a high-quality policy, Provost said. A high-quality policy costs more, but it's worth it if it's fast and easy to make a claim, get it approved, and get it paid, Provost said.

• F&I managers should do regularly scheduled training, as often as three or four days a week. Provost does in-house training instead of hiring a vendor. “We don't just sit around and shoot the breeze, either,” he said. Training keeps F&I managers up to date on new products and new features, and also builds team spirit. Over time, that encourages employee retention, Provost said.

• F&I managers and salespeople need to work at “soft” turnovers. For instance, the F&I manager comes out on the showroom floor to meet the customer, instead of meeting for the first time in the F&I office, Provost said.

• Showcase customer testimonials and make them easy to find. Provost said Nissan of Bourne puts customer testimonials on its Web site and groups them by dealership department, such as sales, or service, or finance.

• Offer a smaller number of higher-quality F&I products, such as GAP and extended service contracts. “You're going to have to start to understand what's effective for the customer, not what's the biggest moneymaker for the dealership,” Provost said. “We only sell the manufacturer's warranties (extended service contracts), not some offshore account like some dealers have set up to handle claims -- only when you need it, it's hard to get a claim paid.”

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Replies to This Discussion

Permalink Reply by Ben Misra on January 9, 2011 at 5:07pm

How much back end and how much front?

Permalink Reply by Jack Higginbotham on January 9, 2011 at 6:59pm

All Back End Ben. I wonder what their finance penetration is? Either way, they are doing a great job. Too bad they won't share their secrets here on dE. Anyone else out there doing these kind of numbers?? Share them with us. My store did 1180 per car last month.

Ben Misra said:

How much back end and how much front?

Permalink Reply by Ben Misra on January 10, 2011 at 3:52am

Jack, my issue would be that a $ 1400 per copy back end sound excessive in a store with 11 used cars in inventory. They have less than 80 new cars in stock.(based on their website).

So on a good month they sell probably less than 50 units.

Figure they finance 80% of them. That's only 40 units.

My point is that I have run 30 car used car operations at $ 2000 per car back end as well as 600 car per month stores at

$ 1000. So it's all relative.

Without proof , it's just another car story.

Permalink Reply by Tony Provost on May 2, 2011 at 12:29pm

Jack Higginbotham said:

All Back End Ben. I wonder what their finance penetration is? Either way, they are doing a great job. Too bad they won't share their secrets here on dE. Anyone else out there doing these kind of numbers?? Share them with us. My store did 1180 per car last month.

Ben Misra said:
How much back end and how much front?

Permalink Reply by Tony Provost on May 2, 2011 at 12:44pm

To answer your questions. Jan-apr. 2011. We are at 65% finance penetration. We have averaged 1298 per delivery in finance. This is after chargebacks. The front end has averaged 1763 per copy. This is also after wholesale. Total units 276 or 69 units per month. We are carrying 110 new cars, on a 90 day average. We are carrying on average 30 used car units. The average split thru april, 39 new and 31 used. I control inventory. We have made 7200 profit on floor plan costs this year, so far. We have 1 finance manager, myself, and 5 salespeople. We strive to make every customer a RAVING FAN! We make our experience,fun and informative. We give all of our customers, a road map of what is next. If you have any questions, please email me at, www.tony@nissanofbourne.com. Have a great day.

Permalink Reply by Tony Provost on May 2, 2011 at 6:03pm

Jack Higginbotham said:

All Back End Ben. I wonder what their finance penetration is? Either way, they are doing a great job. Too bad they won't share their secrets here on dE. Anyone else out there doing these kind of numbers?? Share them with us. My store did 1180 per car last month.

Ben Misra said:
How much back end and how much front?

Permalink Reply by Tony Provost on May 2, 2011 at 6:19pm

Jack, The action plan, daily rules. We expect to sell products, so we do. We get everyone involved. Service people, salesman, fandI, myself. We talk about the products, we believe in the products, we close on the products, daily. We have an excel spreadsheet in fandI, we monitor our productivity, several times a day. The products are expressed during our conclusion of writing the deal. Our fandI manager, meets customers on the floor, talks with our customers, brings them to her office. Every customer, gets pens and travel mugs, from fandI, THEN all menus, and customer criteria is fully expressed, before presentation. This is Nissan of Bourne's way. We all believe in it, THAT'S the BIG SECRET. Any questions, call me at 508. 759-4400.