People don't fear being sold during times of economic prosperity, because spending a little extra money isn't a big deal when you have more than enough. But most people today have less disposable income. They will work hard to make what they perceive to be the most dollar-saving decision possible. For some, the word "No" means a lower payment coupon. In order to get them to buy F&I products, we must learn to intelligently relate those products to saving money.

Many people don't realize exactly how much has changed in the last 25 years. Household income is stagnant, but the cost of goods and services keeps trending upward. This presents more need than ever for customers to protect their budgets — and more opportunity than ever for F&I managers willing to lead with genuine advocacy rather than pressure tactics.

The Free Money Years

From 1993 to 2008, Americans had more disposable income and the cost of living was better balanced with average household income. Times were good. Housing values were on the rise, allowing people to borrow more money against their homes with little or no concern about paying it back. Home values had doubled over the eight-year period preceding the housing crash of 2008.

The "free money" idea came from the basic belief that you could buy a house, borrow more than its value, and later sell it for a high price to pay off the loan — essentially diverting potential real estate earnings toward purchases that were outside the actual budget. And since it wasn't coming out of the budget, the money felt "free." It paid for vacations, pools, elective surgeries, house remodels, and lots of cash-paying car buyers visiting dealerships. Borrowing 125% of home value was normal by 1995 and continued at a record pace until 2008 — when the bubble popped and housing values plummeted back to early-2000s levels.

Caught in the Cycle

From 2008 to 2011, almost everyone struggled. The automotive industry was no exception, as many dealers didn't survive. While adjusting to the new economy, F&I managers began telling me that word-tracks were suddenly uncomfortable to use. Even worse, producers who continued employing them were having limited success.

These revelations forced me to take a hard look at F&I in this new environment. I began taking benchmarking assignments in distinctly different markets and measured my own numbers. I quickly discovered that the F&I training I'd received in the early '90s — and all the closes I'd taught hundreds of managers as a full-time F&I trainer — had become a thing of the past.

So rather than presenting and trying to overcome objections, I began having conversations. I also began viewing F&I products as ways to protect my customers' budgets instead of just ways to make gross. Yes, the gross was still there — but my attitude was completely different. My product count went way up and my chargebacks went way down. By not selling, I sold a lot more.

"For the first time, I was focused on helping people, not selling people. The difference is paramount."

For the first time, I was focused on helping people, not selling people. I listened and shared with people. I kept my process transparent. I ran the highest numbers I ever had. In fact, I outperformed the existing F&I departments in every store I worked in during that period.

From Prosperity to Austerity

In 1993, you could buy a base model F-150 for $10,877. Today, a base F-150 has an MSRP of nearly $30,000. That's a more than 175% increase. Talk about inflation — and according to Kelley Blue Book, it's still trending upward.

Wages, on the other hand, have barely changed. The average median household income between 1993 and 1999 grew by about 15% to $58,665, where it peaked and remained stagnant until 2012. Income is now trending upward, but it remains well below where it should be relative to advances in automotive inflation. And no relief is in sight — because when wages rise, the stock market falls as corporations recognize that higher wages mean lower profits, so prices must go up again and the cycle continues.

Economic prosperity is gone for most Americans. Wages are down and inflation is up. People are focused on not getting sold — even when products like vehicle service contracts, prepaid maintenance, and GAP are specifically designed to help them save money and provide budget control.

Living Check to Check

As a culture, Americans live check to check. In fact, 78% of your friends, family, and co-workers live check to check. The CEO of a publicly traded auto finance source recently shared that many of the company's customers have less than $400 in emergency savings — and it's not just subprime. It's everyone, including customers shopping at highline stores.

The truth is that most people spend every dollar they make. It's not a criticism — it's a fact backed by data. And it's not necessarily a bad thing. The reason for living check to check is often noble: people love their families and invest in them. They live in nicer neighborhoods, drive safer cars, eat better foods, send their children to better schools, enjoy family vacations, and improve their quality of life — even when money is tight.

But money will become tighter as trends continue. New-car prices have reached all-time highs. Interest rates are expected to continue rising. The end result will inevitably be more customers arguing over payments. This is the landscape we're operating in — and it requires a corresponding shift in how we approach our work.

A Noble Pursuit

When we adopt habits of helping — not just selling — we can begin having real conversations about real economics and how our products actually protect customers' budgets. This is more important than ever because the likelihood of continued inflation is high and our customers need F&I managers operating with a spirit of nobility.

Beyond our customers, we need to do it for ourselves too. If the experience in F&I doesn't improve for customers, dealers will continue searching for ways around the F&I department. But the solution is simple in principle: customers need to feel protected and treated well. The dealer needs to profit. If both sides get what they want and need, the F&I pro will be fairly compensated for their efforts.

There is a version of this job that is genuinely noble. That version exists in offices all over the country — the F&I manager who sits across from a family, understands their budget, and helps them leave with coverage that will genuinely protect them when life gets hard. That F&I manager isn't just making gross. They're making a difference. And ironically, they're making more gross too.