What are the most common mistakes dealers make in F&I that cost them profit, and how can they be avoided?
Having had the opportunity to work with many different dealerships, both large and small, one recurring issue I’ve noticed is that many F&I departments are collectively struggling with a mindset challenge — a limiting mindset if you will.
I first recognized this when I transitioned into F&I many years ago. A PVR of $1,500 to $1,700 was the norm; performing anywhere from $1,800 to $2,000 or more made you the cream of the crop. It wasn’t until I moved to a more competitive market that I realized these numbers paled compared to what other Finance Managers were achieving nationwide.
I used to run just over $2,000 per deal and was viewed as a top performer in my department. However, that belief was quickly shattered when the other three new producers I started competing with were consistently hitting $3,000 or more on average, along with much higher product penetration than I had previously experienced.
The finance director first sat me down and encouraged me to observe the other F&I managers as they presented menus and closed deals. Coming from a smaller city, where the staff tended to be less aggressive and less experienced, I was amazed by what I saw — the setups, concepts, pitches, presentations, persistence, and handling of objections were unparalleled. Long story short, I quickly absorbed the team’s expertise like a sponge.
By the second half of my first month, everything changed.
I was now consistently closing deals at $3,000 or more. I swiftly adopted the practices of my new team — and that’s the trick: the key word is “practices.” If you implement specific actions, you can guarantee a result; it’s just a matter of figuring out which actions to take during the F&I process to achieve favorable outcomes.
For example, if I’m overweight and desire to become fit, the actions I need to implement daily will bridge the gap between where I am and where I want to be.
Fast forward to today, I observe this situation daily. Finance managers often try to second-guess what their customers want. They may hesitate to hold onto two or three thousand dollars on service contracts, be reluctant to retain points on their customers, or shy away from asking for the maximum the lender allows.
This reluctance isn’t their fault; they simply haven’t been shown what’s possible. That’s where my team at Automotive Reinsurance Concepts comes in. One of the advantages of partnering with us is our ability to engage hands-on with your F&I department.
We won’t just tell your F&I managers what they should do to maximize deals; we will show them by getting involved directly and demonstrating what’s possible. This training approach broadens their perspectives and eliminates limiting beliefs.
Most importantly, your F&I managers will gain invaluable knowledge and experience that would otherwise take decades to acquire.
In short, to truly move the needle, it’s crucial to remember that we are ultimately the sum of the people we spend the most time with. Exposing your team to new possibilities, fresh ideas, and more experienced F&I professionals is essential. Have you heard of the chameleon effect? This psychological phenomenon explains how individuals subconsciously mimic the behaviors, mannerisms, and language of those around them.
Now, envision strategically applying this concept in your business — bringing the best of the best into your F&I operations. I’ve personally seen dealers implement this successfully, with irrefutable results.
When you partner with the right team, this strategy can boost PVR and product penetration standards, increase competition among your F&I Managers, elevate numbers, and foster a new energy and winning culture within your organization. Your F&I managers will begin to embody what it means to be true F&I professionals. The No. 1 mistake that costs dealers’ profits is insufficient exposure to exceptional F&I competence and a lack of consistent training.
Brandon Vargas’s article, originally published in AutoRemarketing News (May 2025, Commentary Section)
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