Guide to F&I

August 19, 2021

Guide to F&I

Any time someone goes to an auto dealership to purchase a vehicle, one of the key steps in the buying process will be for them to visit the F&I department. In this step, an F&I manager at the auto dealership will help a customer purchase a car and set them up with other products and services to upgrade their vehicle ownership experience. Since the F&I department plays a crucial role in the vehicle buying process, many dealerships focus on improving this department and finding new ways to provide exceptional service to their customers.

Find out more about what F&I means, how F&I departments work and why they're so important. You may also want to know about the primary F&I products and services they offer and these departments' primary benefits.

What Is F&I in Auto Sales? What Does F&I Stand For?

F&I stands for Finance and Insurance. At an auto dealership, the F&I office is the dealership's finance department. If you're purchasing a vehicle from a dealer, you'll go to this department to complete your vehicle purchase and select various optional products and services.

What Is the F&I Office at Dealerships?

The F&I automotive office at a dealership is responsible for handling the various paperwork associated with purchasing a vehicle, such as DMV documents. Besides helping a customer complete the required paperwork, these departments will check a potential customer's credit score, give buyers loans, review a customer's auto insurance and offer various products and services the customer can purchase for their vehicle. 

A dealership will staff their F&I office with experienced professionals who have the required training to know the ins and outs of car buying. The staff of an F&I department is primarily F&I managers trained to properly handle the contracts and forms required in order to purchase a car.

The Role of F&I Managers at Dealerships

An automotive F&I manager's role at a dealership is to facilitate the actual car buying process, provide buyers with the option to purchase additional products or services, and generate extra income for the dealership besides what they'd make from a vehicle sale alone. If you're purchasing a vehicle from a dealership, the F&I manager will typically be the person you speak to in order to conclude the sale of your vehicle.

Why Do F&I Departments Matter?

F&I departments are key to a dealership's success, as they play a significant role in the sale of a vehicle and assist customers as they pick a financing plan. While salespeople are experts on the vehicles they're selling, F&I department professionals are experts in the process of legally selling the vehicle. They're also experts at determining the appropriate financing terms and crafting loans desirable to a customer, with an F&I manager often working with banks to provide financing deals to customers.

Alongside F&I professionals' work facilitating a vehicle's sale, they're also crucial to future customer satisfaction and their dealership's overall revenue. Since they know the ins and outs of various F&I products and services, they present them to customers, explain how they work and see if the customer is interested in them. These products and services can better protect vehicle buyers after they've bought the car. For example, an extended warranty can give customers long-term protection, while vehicle service plans can help customers receive top-quality repairs and maintenance for their new vehicle.

Besides helping customers get more out of their vehicle, these products and services bring extra revenue to the dealership. Automotive F&I products and services allow dealerships to earn more, as they'll bring more opportunities to generate revenue by selling these options alongside the vehicles they offer. While automotive F&I services and products usually sell for much less than a vehicle, they can add up over time, providing dealerships with a significant source of revenue.

The combination of better customer service and greater revenue for a dealership allows dealerships to set themselves up for future success. For example, better customer service will translate to more loyal customers, leading buyers to come back to a dealership when they need a new vehicle. The ability to sell more services and products also allows dealerships to be more financially secure, as they'll have more opportunities to generate more money with few extra costs. 

What Services and Products Does an F&I Office Offer?

Since the products and services an F&I department offers are so important to a dealership's ability to make extra revenue, you may be interested in learning more about the main types offered at dealerships today. Being more knowledgeable about the top products and services can give you some ideas about what you could offer. 

Review some of the top finance and insurance products and services many dealerships offer to customers:

1. Vehicle Service Contracts and Maintenance Plans

Vehicle service contracts, sometimes called maintenance plans, provide vehicle owners with pre-paid service visits at the dealer's facility. If you select a vehicle service contract, you won't have to worry about paying scheduled service visits in the future, as the contract will cover them. These contracts also can set the price of labor or parts, helping you avoid price increases. Besides covering the costs of parts and labor, they safeguard you from overall maintenance expenses.

Generally, maintenance plans include oil changes and other kinds of maintenance your vehicle needs at set intervals. Some car buyers enjoy using these plans since they allow the vehicle owner to only worry about paying for their car payments rather than about future maintenance services. 

2. Extended Warranties

Extended warranties are some of the most popular F&I products available to vehicle buyers. When someone purchases an extended warranty, they safeguard themselves against repair and maintenance costs after the standard warranty's expiration date. As a car gets older and starts to have more maintenance problems, an extended warranty may pay for itself, as it can cover the costs of various repairs.

Besides covering the costs of more standard repairs, extended warranties also protect you from more catastrophic damage to your car. An extended warranty can save you a significant amount of money in repairs. Even if you never get in a major accident or have to pay for major repairs, an extended warranty can give you peace of mind by ensuring you never have a major, unexpected cost.

3. Anti-Theft Products and Plans

Buyers can often purchase various anti-theft products from an F&I department. These products often include devices, such as starter interrupters, car alarms and GPS locators. Another popular product comes in the form of VIN etching, where the dealer will engrave the vehicle's identification number on its window and other valuable parts, such as the engine. These engravings can prevent theft by making it harder for thieves to sell the vehicle or other various parts on the black market.

Some anti-theft plans also pay more to customers than standard insurance settlements in the event their car is stolen or a total loss. Like warranties covering repairs and vehicle damage, these plans cover you in the chance of a theft.

4. Gap Insurance

Gap insurance protects customers by paying off the difference between what you'd owe following a theft or accident and the value of your vehicle. Many new-car leases already come with gap insurance included, but it can be useful if you've put less than a 10 percent downpayment on the vehicle. Since this insurance will pay the difference, those who've put down a smaller downpayment can get protection from having to continue to pay high monthly payments even after their car's been stolen or significantly damaged.

5. Wheel and Tire Warranties

Wheel and tire warranties are very popular among many customers. These warranties cover damage to your vehicle's tires and wheels. While tire manufacturers generally provide a warranty for their tires, these warranties generally only protect buyers from tire defects. Wheel and tire warranties take the protection to another level by also covering you from damage to them. 

If you live in an area where you drive on rough pavement or like to take your vehicle on back roads, wheel and tire warranties can be an excellent investment. Even if you don't live in an area that's particularly hard on your tires, your wheel and tires will experience wear due to their proximity to the road and the role they play. As a result, wheel and tire warranties can often be a wise choice, safeguarding you against expensive wheel and tire repairs or replacements.

6. Interior and Exterior Protection 

Interior and exterior protection is a service that gives vehicle owners protection over their vehicle's paint and various interior features. For example, exterior protection plans will often cover bird droppings and tree sap damage, as well as faded exterior paint. The interior protection part of this service will usually cover faded interior colors and damage, such as burns and ripped seats. If you want to keep your vehicle always looking its best and avoid unexpected costs, interior and exterior protection is a good choice.

7. Key Replacement

Modern keys feature expensive technology and anti-theft components, making them expensive to replace. Key replacement coverage protects customers when they lose their keys or need to replace them. 

When you have key replacement coverage, you can expect the plan to cover the replacement costs for a new set of keys. These plans will also usually cover the reprogramming costs to ensure the new key works with your auto security system. Alongside covering key replacement costs, these plans typically provide roadside assistance, meaning you won't have to pay if you've locked your keys in your vehicle and need a professional to come to open it up for you.

8. Lifetime Engine Warranty

If you don't want an extended warranty for your entire vehicle, a lifetime engine warranty can be a good choice. Engine repairs and replacements are often the most costly pieces of maintenance, especially if major damage occurs. These warranties guarantee that you'll have your engine repair and replacement costs covered for the entire time you own the vehicle.

Besides appealing to customers, lifetime engine warranties also help dealerships. These warranties usually require vehicle owners to stick to scheduled maintenance based on the owner's manual and come to the dealer's service department for maintenance. As a result, these warranties boost service retention. Since these drivers will return to the dealer for service, dealers can boost customer loyalty and generate income from other services not covered by the engine warranty.

9. Product Bundles

Dealerships also regularly combine auto finance products into a bundle to help customers receive multiple products for less money than if they bought them individually. If you want multiple products for your vehicle, a manager will often work with you to bundle various dealership finance and insurance offerings together to help you save. Alongside helping customers receive savings, product bundles can boost a dealership's sales by helping an F&I manager sell more products to a customer.

What Customers Can Expect From an F&I Office

If you're buying a vehicle, you'll have to pass through the F&I office before receiving the keys to your vehicle. Before you get to the F&I office, you'll have already selected a vehicle and spoken to a salesperson about pricing. 

Since dealerships tend to have more salespeople than F&I managers, you can expect to wait for at least a half-hour, if not more, before the F&I manager can see you. Generally, the time it takes for you to see the F&I manager depends on the number of people in line in front of you, the time of day and if your loan documents are prepared. Usually, weekends tend to result in longer lines, meaning you'll likely have to wait longer.

Once you reach the F&I department and speak with an F&I manager, the process should take around 30 to 45 minutes. The F&I manager will help you go through legal forms mandated by your dealer, city or state. These legal forms will ensure you're complying with various car buying regulations and completing the right documents to finish the sale. 

With various forms completed, the F&I manager will discuss payment with you. At this stage, you can give them a down payment, and the F&I manager will reach out to banks and other financial institutions. They'll likely provide you with several loan options featuring different loan lengths and interest rates. If you're already pre-approved for a loan by a credit union or bank, the F&I manager will likely try to beat that loan, providing you with an option featuring a better interest rate.

Besides working out the financing for the vehicle itself, the F&I manager will typically conclude the deal by offering various F&I services and products. The manager will walk you through the various products they offer and explain any fine points you might not understand. If you select any of these products, the F&I manager will add them to your loan. Once all parties have signed the forms and decided on financing, you'll be able to drive your new vehicle off the lot.

Benefits of an F&I Department

An F&I department provides several benefits to dealerships and customers, making them an essential part of the vehicle-buying experience. If you're a dealer looking to upgrade your offerings, you'll likely want to review their primary advantages. Review some of the top F&I benefits for auto dealerships below:


  • More sales opportunities: One of the biggest ways an F&I department helps dealerships is their ability to generate more revenue. Instead of just relying on the money from selling a vehicle on its own, an F&I department gives the dealership the opportunity to sell additional products and services. As a result, a great F&I department will bring in a significant amount of revenue for the dealership, making it more profitable.
  • Increased compliance: You'll find lots of rules and regulations surrounding the sale of vehicles. An F&I department is critical to both the customer and dealership's legal compliance. Other staff members at a dealership aren't equipped to handle all of the paperwork required to make the sale legal, so the F&I department ensures the dealership doesn't run into legal issues and reduces risk. Along with helping the dealership, an F&I department assists the customers, ensuring they have all the documents required to legally own a vehicle.
  • Greater customer satisfaction and protection: All of the products and services an F&I department offers can increase customer satisfaction and protection. Since many of these products cover the costs of various repairs and services, customers can have greater peace of mind knowing they won't have unexpected costs. Besides giving them more protection, these products can improve a customer's overall satisfaction with the dealership, as they'll feel the dealership has met all their needs. 
  • Improved customer loyalty: Another way F&I departments assist dealerships is their ability to improve customer loyalty. For example, if they help a customer get a great deal on their vehicle's financing, the customer might be more likely to come back for another vehicle in the future. Additionally, warranties and other service contracts can encourage buyers to return to the dealership for maintenance, leading to a stronger relationship between the customer and the dealership. 

How Line 5 Helps F&I Offices at Dealerships

Typically, a dealership has more salespeople than F&I managers, leading to a bottleneck in the sales process. Oftentimes, buyers have to wait over an hour to see an F&I manager and complete their purchase. These wait times can lead to lower customer satisfaction and increase the stress of your staff. Due to the potential negative effects of bottlenecks, it's crucial you have an efficient F&I system.

At Line 5, our F&I system can help managers reduce bottlenecks by giving them the tools they need to work faster and more efficiently. When you first contact us, we'll analyze your dealership's processes, goals, values and business model to provide you with tailored solutions to any challenges you're facing. As your partner, we'll finance your F&I products, helping your team quickly find the best options for your customer's needs instead of worrying about whether you'll have the financing to offer them.

We regularly help dealerships improve their F&I performance with automotive F&I software. This F&I menu software gives your managers an easy-to-use dealership dashboard, allowing them to better manage customers and deals. This software also speeds up signature collection and report-and-contract generation. Due to these features, an F&I manager can see more customers throughout the day and devote their time to other tasks. 

By giving our partners an opportunity to use our dealership F&I software to increase their efficiency, we also help dealerships improve their customer satisfaction. We don't require down payments, loan limits or a customer's credit rating before we approve a financing plan. We also allow you to adjust a loan's terms to better serve your customer. This flexibility gives you the chance to better tailor your offerings to the particular needs and preferences of individual customers.

Partner With Line 5 Today

With all of the benefits of working with Line 5, you might be interested in partnering with us. We take pride in improving the F&I process at car dealerships all around the country, delivering service that can't be beaten. Take a moment to find out more about how partnering with Line 5 works. 

If you're ready to partner with us, sign up to become a partner today. Please feel free to contact us with any questions you might have about F&I for auto dealerships or our offerings.