The fact that we still refer to F&I departments as “The Box” is archaic, but its nothing compared to the tactics we used to extract money from our customers.
When F&I first emerged, many dealers adopted a process called the “Chute and Box”. They’d promote ringers from sales to F&I and give them offices in an isolated part of their dealership. The walk to the office was considered the chute, the office itself was the box where F&I Managers would jam people into over priced products that often time’s they didn’t even know they’d purchased.
Ironically the “Chute and Box” which we’ve abbreviated to “the Box” comes to us from slaughterhouses. The chute is a narrow metal passage that animals pass through in single file. At the end of the shoot is the knocker box where the animals are shot is the head by a stun gun before having their throats slit. This is unpleasant to say the least, so why does our industry use such an offensive term to label one of its most profitable departments?
The good news is that many of those aggressive sales tactics are gone; full disclosure and compliance have seen to that. The bad news is we’re still dragging people into the box after subjecting them to a lengthy sales process that they hate. And for years they didn’t have a choice that is until now.
Why hasn’t F&I evolved?
The argument that supports this process is that F&I is the last unencumbered profit centre that dealers have left and without it many would go out of business.
Business managers are keenly aware of this and love to trumpet the fact that their departments are amongst the most profitable in the dealership. NADA even substantiated this in 2014 when they reported that while F&I only represent 3.6% of the average dealerships revenue, it generates 22.9% of their profit. No dealership can afford to lose this profit centre so they continue to facilitate an antiquated, confrontational sales process.
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