Inside Automotive with Jim Fitzpatrick, powered by CBT News

How modern F&I leaders protect profit with Paul Brown

• Jim Fitzpatrick • Season 1 • Episode 31

Share episode

We sit down with Paul Brown to relaunch F&I Today and dig into what modern F&I should look like post‑COVID. From digital menus to staffing ratios, we share practical ways to protect profit, reduce chargebacks, and raise CSI without sacrificing speed.

• Why the final F&I conversation shapes long‑term loyalty
• How to use digital tools and remote closes to increase trust
• Presenting a complete menu to every customer
• Turning customer preferences into higher PVR and fewer chargebacks
• Framing protection as payment stability amid rising costs
• Year‑end focus on process discipline and accountability
• Staffing benchmarks to avoid bottlenecks on busy days
• Building a bench and using the desk to speed submissions

Stay tuned to cbtnews.com for the first F&I Today show next week; we’ll send notices in our emails for the exact time


Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

For more content, visit CBTNews.com and follow us on your favorite podcast platform.

Announcer:

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick:

Hey everyone, Jim Fitzpatrick. Welcome into another edition of Inside Automotive right here at CBTnews.com. CBT News' newest show, or I should say oldest show, F&I Today, is now being brought back by popular demand, and it's going to be hosted by Paul Brown, who's the vice president and partner of Ascent Dealer Services. The show is expected to air next week, so stay tuned to cbtnews.com for that. We'll send you out some more information for the exact time. Today we are joined by Paul in the studio to tell us more about what we can expect from this great new series. So, Paul, thank you so much for joining us in the studio.

Paul Brown:

Thanks for having me here. It's a pleasure.

Jim Fitzpatrick:

Absolutely. So uh you've been in the studio all day, I should mention, shooting your your uh episodes of F&I today and uh with sitting in the control room with the team, uh you knocked the cover off the ball. I mean, I I know that I know that our audience, and especially those in finance and leadership at dealerships, are gonna are gonna love the content.

Paul Brown:

I appreciate it. It's uh something that I'm very passionate about, so it's easy to talk about.

Jim Fitzpatrick:

Sure. So for those people that are not as familiar with Paul Brown as we are here at CBT News, tell us a little bit about your background and your experience in the dealership community.

Paul Brown:

So I've got 28 years in retail automotive and everything from started selling cars at Schomburg Honda outside of Chicago to uh got my first finance job, which brought me back down to kind of the St. Louis market.

Jim Fitzpatrick:

Okay.

Paul Brown:

And then I was a, I mean, pretty much the whole time it's been in finance in some version or another, uh, finance director for a big group in St. Louis. But I always tell people, even though I'm on this side, I'm still- Adam and I make the same joke. We're recovering F&I managers because it's something that we're completely passionate about. When you do it that long, you have to be passionate about it. And uh what we see is that that it's the greatest thing that has an impact on customers because it's the last impression that they have when they're buying their new their new car going out the door. So, and what we see is a lot of really great things in the marketplace. We see a lot of things that need some attention. So our passion is to coach and just help people evolve into better versions of themselves. That's right. And when they're that we become better versions of dealerships and then people like us more.

Jim Fitzpatrick:

That's right. That's that's the key. And I agree with you. The F& I manager today is so vitally important, not just for you know, to garner great CSI for a dealership, uh, but but also to take care of the dealer's assets, to make sure everything is done right. You know, we see so much fraud out there today because of all of the digital capabilities that people have and the fraudsters have out there, that you've got to have that one individual uh in an F&I manager that's making sure everything is legit and the way it's supposed to be. And then in addition to that, having a strong PVR, right? That's what it's all about.

Paul Brown:

Yeah. That's uh it is what it's all about. And what we find is that if we do a really good job of relating to our customers and finding out who they are and giving them the customer experience that not only they want to have, but that they deserve to have. I mean, if somebody's in your store spending $80,000, they should have a great experience. That's right. And we should set them up to have a great experience with that vehicle. And if we do those things properly, the PVR and the PPRU and all that stuff just falls in line. And it becomes magical for the dealership because CSI is high, customers are happy, service engagement is really high. Yeah, that drives them back to buy more cars where they buy more F&I products. So it's this circle of kind of circle of life, if it's done really well, and it all stems from the F&I department because the F&I person can really facilitate all that, or they can drive the customer out where the customer never comes back for service.

Jim Fitzpatrick:

Yeah, it's true.

Paul Brown:

If it's a bad experience.

Jim Fitzpatrick:

And you've probably worked with some of those FI managers out there, I know I have as well, where they they might have had a strong, you know, per vehicle number uh working for them, but man, they were not only were they not fun to work with, but they were hard on the customers, right? And and it was amazing to me because I'd say, why does the dealer allow this? You know, you go well, the guy's doing 3,200 bucks a copy. You know, but at the end of the day, that's that's not that's not everything. I mean, you gotta your point, you gotta make sure that customer's happy when they're leaving.

Paul Brown:

I mean and what we find is that uh it's another thing that we talk to dealers about. We say it's not about how much money we make, it's about how much money we keep.

Jim Fitzpatrick:

Yeah.

Paul Brown:

And what we find is that sometimes those people that don't give a good customer experience but still have the high P VR get a ton of chargeback. That's right. So it's all coming back. I mean, that's right. It's not impressive if a guy puts $200,000 on the books in a month, but he has $40,000 in chargeback. It's all fake money.

Jim Fitzpatrick:

That's right. That's right. Yeah, no question. So tell us about the series. What are uh our what's our audience going to learn when they watch F&I today?

Paul Brown:

So we're gonna dive into everything from process and what are some best practices that we see. One of the benefits that we have just as an agency with Ascent Dealer Services is we have thousands of dealerships across the country. So we get to travel and see good best practices and some of the not maybe not so great things, yeah, and help kind of put all those together and kind of have it's like having a super dealer group. Like if you had a dealer group, if you owned a dealer group, they had a thousand stores, you could just by law of large numbers figure out what's working, right? That's right. So we're gonna talk about everything from processes to personality types to sales psychology to getting into individual closing conversations. And more than that, just try to open the finance professionals' eyes as to what it is that our customers want, what it is that they don't like, because our customers are telling us, they're actually screaming it at us. I know. Um, and deliver that. Right. It's pretty simple. You know, I mean, we make this business way more complicated than it needed to be.

Jim Fitzpatrick:

We do that, don't we?

Paul Brown:

People business.

Jim Fitzpatrick:

It is, no question about it, for sure. How's uh F&I evolved over the last few years? I mean, you do when you look at it the F&I department prior to COVID and now five years outside of COVID, we did learn a lot during those formative years in during COVID, didn't we? About what customers are willing to do from the comfort of their home. And uh and then of course we see more video being used in the closing of F&I uh today. Talk to us about some of those changes that you've seen.

Paul Brown:

Yeah, we've seen a lot of things, and it's been really eye-opening. And what we found is that we're seeing a lot of things that came to fruition because COVID kind of forced it to that customers have wanted for a really long time. We just have refused to give it to them. Right. Right? Customers have wanted to close on their terms in their comfort space for a long time. We said, no, come here. Write the biggest thing, BDC, get an appointment, show up, right? So now customers being able to transact from the comfort of their home and us using tools like Zoom or something like that, and having the ability to share screens and having these interactive menus, being able to get the customer information about the F& I products earlier. Um, customers, when they're surveyed, 67% of customers said they would be more likely to buy F&I products if they had earlier exposure to them. So we can do a lot of things differently if we're handling a customer that's off site because time isn't quite so critical, right? It's not this rush and get this customer out of here. We have a little bit of time to do things. And what we're gonna see is more and more customers are gonna want to transact that way. It's the it's the Amazon Prime mentality.

Jim Fitzpatrick:

That's right.

Paul Brown:

Right? I I when I buy things, most of the time I go, you know what, I need this, and I look and see if it's on Amazon Prime, and if I can get it, and if the price is similar to why I can go to Home Depot, yeah, I'm not going to Home Depot. Right. Because the other thing that I do is I go into Home Depot, and the first thing I do is I go, oh, that's cool. Oh, that's cool. And I go and buy something for $40, I leave out at $200. You know, so I think customers want that flexibility. They want the the ability to uh transact on their own terms. Right. And we just got to deliver that. And I think that if we do that, so many people are afraid that, oh, PVR is gonna suffer. We're gonna sell less products. Yeah, I think we're gonna sell more.

Jim Fitzpatrick:

Right.

Paul Brown:

Because we found every single step. You and I have been in this industry for a long time, and we've had uh some major disruptors over the past 20 years. But every time one of those came around that made the process better for the customer, not necessarily us, that's right. We became more profitable.

Jim Fitzpatrick:

That's right. The menu is one of them. I mean, I was we saw when the menu started to be introduced, and everyone's like, wait a minute, the menu. Oh no, no. I I determine what I'm gonna sell to certain customers, and I'm the smartest person out there. And uh and we found a lot of that. But when you said no, present this menu 100% of the time to 100% of the customers in its entirety and give them the opportunity, we found that the PVRs actually went up because people said, you know what, I will take that warranty. Right. When in reality, as uh somebody might look at it and go, this person trades cars every you know 27 months and they're smarter than that, they're not gonna keep it, they're not gonna want the extended warranty or the service contract. Lo and behold, because they were presented it properly, they bought it.

Paul Brown:

Absolutely.

Jim Fitzpatrick:

Yeah, yeah.

Paul Brown:

That was a major one. Um, the ability to to uh submit deals electronically is a major one.

Jim Fitzpatrick:

Yeah.

Paul Brown:

I remember that I was worried about that because I'm I remember the days where you had to score a credit app and service it over and wait two hours. That's right. And I'm like, I'm not gonna be able to talk to my buyer. I mean, I sent my buyer pizza on Saturday to get deals bought, right? I'm gonna they're gonna take that away from me. You know what I mean? So it's there were a lot of, but we found out it's faster, or we could get we could get uh uh more uh uh uh I guess offers to customers faster. So it just made everything better in the process.

Jim Fitzpatrick:

Yeah, no question about it. And I think it finally is is dawning on us in the industry, and I know it's a cliche and everybody uses it, but it really is at the end of the day all about the customer experience, right? That's what's really gonna drive the you know the the the auto industry in you know in the future. Um obviously we see Tesla that comes out and says, now forget the dealer altogether. You can deal directly with us. We're not gonna you know play on price, we're not gonna play on payments. This is it for everybody, regardless of who you are. And I think that we're we're realizing that, uh-oh, we we better change the way we've been doing business over the last hundred years in retail automotive because the world's changing, right? Everybody's got their phone, which is a computer, right on their hip. They can check prices, they can check interest rates, they can check terms, they can check everything right in front of you, right?

Paul Brown:

Yeah.

Jim Fitzpatrick:

And that has changed so much in the way we deliver vehicles to consumers.

Paul Brown:

Yeah, it does. And again, it just goes back to the give the customer what they want.

Jim Fitzpatrick:

Right.

Paul Brown:

You build a better mousetrap, they'll you know, they'll beat a path to your door. Sure. And that's the better mousetrap. The better mousetrap is you going, hey Jim, I see that you want to buy a car. How do you want to transact? Yeah. Do you want to come in? Do you want to sit down with us and then kind of have a person-to-person interaction? Would you like to do everything via email? Would you like to do everything via Zoom? How do you want to do it? Right. And when you're most comfortable, I'm able to have a better conversation with you. And when I can have a better conversation with you, the things that I want to talk about in F& I just make more sense. That's right. Because we don't have garbage products anymore, right? There's no snake oil. They all bring value. So we just got to put the customer in an environment where they go, you know, that makes sense. So sometimes we just gotta like gently move the customer out of their own way.

Jim Fitzpatrick:

Right, right. Affordability continues to be a real thorn in our side in the industry. I mean, that's you know, with the average price of a new car being almost fifty thousand dollars and the transaction price being over fifty thousand dollars. This is a reality that's not gonna go away anytime soon. What impact has that had in F&I? I mean, uh obviously people are maxing out on their payments. I think the average payment is now $750 a month or something like that. But does that put the squeeze on F&I and does that put even more of an importance of the proper training of the F&I department, you know, on in the forefront?

Paul Brown:

It certainly puts more importance on it. And I think if there's a squeeze felt, it's in between the ears of the individual F&I person.

Jim Fitzpatrick:

Okay.

Paul Brown:

Because if we got a customer that's coming in, they're spending $750, and that's a payment that straps them, they can't afford the variability that an unprotected payment brings. Right. Right. So the the fact that they might have to pay for things out of pocket or there's some uncertainty, we don't want uncertainty. We're risk adverse. Human beings just are in general. Right. So when we can provide for them solutions that make sense and that are affordable, and yes, everything's more expensive than what it used to be. But the question is if this $750 payment straps you, then that even if it's small repair, that $800 repair is really gonna strap you. That's right. And those things always happen at the least opportune time. Oh, no quite. You always have a big repair in your car when your air conditioning just went out of your house. So that's exactly right. So I think it's just how we frame it to the customer. I think customers are the same. I don't think that that customer 20 years ago that had a $400 payment and we're talking about $480 versus the customer at $750 now and we're talking about $900. I think it's still the same thing.

Jim Fitzpatrick:

Yeah.

Paul Brown:

We just need to understand that that that customer has a little bit of a different squeeze that's on them right now because everything's more expensive from eggs to gas to milk. That's right. So that's right. That being the case, we just have to have different conversations about what does your uncertain future look like? Right. Because the future is uncertain.

Jim Fitzpatrick:

We don't know. That's right. That's right. Um we're heading into the last couple of months here of 2025. We're in, I guess, the last couple of months now into 2025. What are you telling your dealer partners that you're working with across the nation? What do you want them to really hone in on um to ensure that they close the year as strong as possible?

Paul Brown:

The the thing that I really talk to them about, and we've had this kind of discussion quarterly, but I bring it up again at the end of this quarter is when things this this is the time of year where things kind of get a little bit tight, right? We have Thanksgiving, then we have Christmas, there's a lot of things that people are preparing for. So we have to understand that the most important thing we can do within our stores is adhere to our processes that are working. Because if we start trying to change things and adopt things midstream, what we find out is that it doesn't work, and then we've wasted a couple months and now nobody knows what the expectation is. Right. Like if your salespeople know that today is no different than February 12th, yeah. I gotta come in and do the same exact things, I have the same level of accountability, the same things are expected to me, and these are the consequences if that doesn't happen. If that message is consistent, then you'll get consistent results. What happens is it's the same thing as anything else. A dealer has an issue and then they panic and they want to change things, right? Right. I'm gonna panic and change all my advertising, change my message. Well, that may give you a little bit of a lift for a couple weeks, maybe even 30 days. But long term it's a failed strategy. Right. So we got to look at the things that work well, but also really look with fresh open eyes and look at your processes and say, if I'm not where I want to be, it's because I I don't have something implemented that needs to be.

Jim Fitzpatrick:

Yeah, right.

Paul Brown:

So and then that's where you just gotta reach out to somebody that just says, Hey, you're seeing it like us. We'll come in, we'll do uh a no-cost analysis of a dealership and go, hey, these are areas where your process could improve just to help because we truly love to help. But as a dealer, you have to look at everything with fresh eyes and don't go, this is what we're doing because we've always done it this way.

Jim Fitzpatrick:

That's right. That's right. Um, how do you how does the what's the best way to determine how many F& I managers are needed in a high volume dealership? Obviously, if you go into a dealership at, you know, from two o'clock on on a Saturday, there's people waiting around, maybe sometimes two, three, four hours. Drives consumers crazy. So it's still the number one complaint. I think even over you know, price or trade in value or anything else, it's why are we waiting so long, right? Is there a number that you tell your clients, look, for every number of deliveries or every um you know, every amount in terms of F&I income, you should have X number of F& I closers available. Is there a number or how do you

Paul Brown:

I feel personally, and this is one of those things that's controversial, it's like talking about religion or politics, you know? But it's I feel like the sweet spot is right around 70. Okay. That gives each F&I manager time to give each consumer the attention that they deserve.

Jim Fitzpatrick:

70 units for each F&I manager. Okay.

Paul Brown:

And then but it also allows things to move along a little bit faster. And don't be afraid as a dealer principal to start creating a bench. And but what I mean by that is a group of people that are coached up in F& I that can help when you get busy. Right. They can jump and they can do things. They can, but nowadays what we're seeing is more and more to speed things up, we're getting more of the desk, is submitting deals from the desk, yeah, right, to kind of help with that so that when F&I gets to it, they're really looking at it and going, okay, they've already submitted to the captive because the captive doesn't care about look to book, right?

Jim Fitzpatrick:

Right, right.

Paul Brown:

So at least we know that the deal's in there proper and it's it can be submitted. Yeah. So that takes some of the time off. But what I would tell dealers is don't wait, you know, it's kind of like dress for the job you want. Right. If you want to sell 250 cars and you feel like that needs four finance people, then hire your fourth finance person and get them going. Right. And then what you'll do. Build it and they will come. Absolutely, 100%. But the last thing that you want to do is you you don't want to sacrifice profitability on all those other deals because you're going, well, I don't want my finance managers to complain that they're not getting enough swings. Right. The swings will come.

Jim Fitzpatrick:

Yeah. Not only that, but it gives each each F& I manager more quality time to spend with each uh close on each closing, which usually equates to a higher uh dollar amount, right? Rather than just processing eyeballs and going, hey, I've got seven deliveries on this Saturday and I got to get them in, get them out. So if somebody goes, no, I don't think I want that, you go, okay, right. No problem. Rather than going to the deal. Well, wait a minute, Mr. or Mrs. Customer. Let's talk about this for a minute. Absolutely. Yeah.

Paul Brown:

Yeah. So you can just have better conversations. Sure. And I think so. You obviously want speed, but you all, you know, it's kind of that fine balance because you want speed, but you want time with each consumer so that, you know, again, they they have the ability to make a decision in an environment that's not real. So it's fine balance, but I feel like that sweet spot's right around seven.

Jim Fitzpatrick:

Yeah, right around seventy. Makes sense. You kind of have a responsibility too to the sales staff, right? In a dealership to make sure that you're servicing that uh the the the sales team that you've got ample uh F& I managers so that it does run a little bit smoother because nothing gets salespeople more upset than going, oh man, I'm trying to get my people in and it's holding me up from getting even another up or working with another customer on a on a busy Saturday because I'm sitting here entertaining these people for two hours to get an F&I, right?

Paul Brown:

Yep, that's exactly it.

Jim Fitzpatrick:

Yeah, for sure.

Paul Brown:

Yeah, it slows the whole thing down. F&I can become a bottleneck. And there's just some days where it's gonna be. There's some days where it's unavoidable. Yeah. You know, you get you it's and it's again that that Murphy's law, right? You have one finance manager that's on vacation, oh yeah, another one gets sick, that's right down to two, and you have a record Saturday. That's right. Right? It's gonna happen. But at that point, you know, hopefully all your team, everybody knows to chip in. Everybody can just do a little bit extra to facilitate. Again, sales manager, take your ego out of it. Yeah, GSM, take your ego out of it. GM, we've all done the job. Get down and load a deal for crying out loud, right? Think about the customer experience. It's it's about the customer, it's not about that's right. I'm a GM, so I don't need to submit deals anymore. What? Come on, chip in. Let's get in there.

Jim Fitzpatrick:

It's exactly right. Paul Brown, vice president and partner of Ascent Dealer Services, and also the newest uh host of F& I Today here at CBT News. Thank you so much for stopping by here at the studios. We very much appreciate it, and we all look forward to these incredible segments that are going to be coming up next week. So stay tuned to CBT News. We'll send out notices uh in our emails and such as to when you can see the first show. So, Paul, thank you so much.

Paul Brown:

Thanks for having me. It was great. Great.

Announcer:

Thanks for watching Inside Automotive with Jim Fitzpatrick.