How Much Does A Bmw Finance Manager Make
How Much Does A Bmw Finance Manager Make – As costs rise and front-end margins shrink, retailers are looking at some of the highest-paid employees: finance and insurance managers.
Bristol, Tenn.-based Friendship Automotive Enterprises, an eight-store dealership group in Bristol, is reevaluating how F&I managers are compensated after F&I profits increased and the stores dramatically changed positions.
How Much Does A Bmw Finance Manager Make
“Don’t get me wrong, the best manufacturers should be properly compensated, but it’s gone a little too far,” Friendship COO Dustin Walters told Automotive News.
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In 2017, F&I managers earned an average of $142,048 nationally, up 3 percent from the previous year, according to National Automobile Dealers Association data obtained by Automotive News. This compares to an average salary of $134,625 for sales managers and $121,918 for service managers. The only grant position that earns more on average than an F&I manager is general manager, at $328,150.
According to the data, F&I manager compensation is increasing by thousands of dollars on average each year. A stark salary disparity between F&I executives and their executive peers can disrupt the traditional career path and cause salespeople to question the value of the F&I position. However, cutting or cutting F&I wages can drive away talent, especially if managers know they can do more.
In the industry, Walters said, sales managers often make 3 to 4 percent of the gross profit on all transactions, depending on the store’s sales volume. If a customer purchases F&I products financed through a subsidy, the F&I manager typically earns 10 to 15 percent of the F&I gross profit. But if a dealer wants a manager’s total compensation to be 30 percent, Walters said, there’s more to go.
“To be very distant with the F&I manager … ultimately he owes all the opportunities to the sales team – I have a problem with that. Nothing happens until you sell a car, right?”
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Elevated F&I pay is shattering the traditional career path of friendship from salesperson to F&I manager to new used car manager to general manager. As Walters argues, who gets a pay cut?
While pay increases for F&I and service managers have been similar since 2015, in 2017, F&I managers earned an average of 17 percent, or about $20,000 more, than service managers and 5.5 percent — or about $7,500 — more than sales. Managers
Paying an employee or department can damage dealership morale, but high turnover in F&I pay drives away talent, especially given the significant amount of work that goes into that level, warns John Pappanastos, CEO of EFG Cos. F&I training and production company in Irving, Texas.
“These are really killers. They’re guns for hire. They run such a large number and generate so much profit for the dealer that if you drop their compensation, you lose them,” Pappanastos said. “It’s a bad economic decision. As long as my team is rich and I’m rich, why do I care?”
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Adjusting F&I manager pay is a recent move, said Adam Lee, president of Lee Auto Malls in Auburn, Maine, which has seven new car dealerships and 13 used car stores. Reducing the wages of a skilled and holding F&I producer is difficult to keep them out.
“It’s hard to take your best people and cut their wages, and even though we do that, sometimes you have to,” Lee said.
According to Lee, F&I compensation should typically be 15 to 18 percent of profits at the office. However, some of its F&I managers keep up to 20 percent of the office’s profits, which are occasionally driven by factors beyond the manager’s control, he added.
“It’s sometimes the nature of the business, not necessarily the skill of the fund manager, that creates the returns,” Lee said. “You can’t do without them, but sometimes they’re the beneficiaries of a dynamic change in where your income comes from.”
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Friendship explores ways to overcome the payment problem. The team works on a hybrid pay plan that includes both commission and salary with a built-in draw system, which Walters says is more equitable for employees across the dealership than the traditional model.
“Payment plans drive behavior,” Walters said. “If you do what you want to change in a way that doesn’t discourage you, that’s the way to change it.”
Vendors have experimented with reducing or eliminating the F&I position over the years. The F&I manager remains an important job, and cutting the department would be a mistake, said Mike Maroon, former COO of AutoNation Inc. Now CEO of Maroone USA, with Four Roofs in Colorado Springs, Colo.
“It’s the second highest paying job in our stores, next to general merchandise manager,” Maroon said. “We pay our F&I people a substantial amount, and they earn it.”
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Maroon is not interested in eliminating the F&I manager position. Usually those who report it, he said.
Justin Gassman, director of financial services at McCaddon Cadillac-Buick-GMC in Boulder, Colorado, says the expertise of an F&I manager is invaluable to dealerships in general. Consolidating the position as a seller comes with compliance risks and could lead to a decrease in sales of F&I products, Gassman said.
“The only reason the dealership is still in business today is for the F&I,” Gassman said. “Without F&I, you have nothing.”
However, some dealers are seeing seismic changes in how the F&I office fits into dealership operations. David Rosenberg, CEO of Prime Automotive Group, told Automotive News Retail Forum: NADA last month that a system of two or three people handling the customer stagnates relationships. More customers shopping online and spending less time in a physical store will eventually lead to the elimination or replacement of many dealership departments.
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“Potentially, an F&I manager will be a thing of the past. The BDC agent will be a thing of the past. We’ll have sales people who can handle the client from A to Z,” Rosenberg said.
Lisa Porches, CEO of the 13-story Carter Myers Automotive Group in Charlottesville, Virginia, said big changes to the industry will only come if they reflect consumer demand.
Borches believes the high salaries of F&I managers will only be sustainable if their duties are shifted to the sales floor. He envisions a hybrid manager integrated with the sales desk, which he says will generate the deal first. The Hybrid Manager will train sales associates on fulfillment and sales of F&I products.
“You can’t sit in an F&I office, present a menu and print documents and sell some product, maybe five years from now,” Porch said, “maybe even two years from now.”
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There’s no magic pill to bridge the gap between compensation for F&I executives and other managers, Walters said. He plans to make small changes one store at a time to find out what works for Friendship.
“Bad fund managers usually don’t last long. You need clean papers; you need to work with the banks,” Walters said. “If anything, sales managers say, ‘If they want to take that pressure, [they] have to do more than me.'” I’m surprised I don’t hear about it anymore.
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Finance & Insurance Report: Sign up every Wednesday to receive news, ideas and commentary on how to increase profitability from your F&I products and services. Lars Nielsen will take over as Managing Director of BMW Group Asia, effective September 1, 2021. Prior to his new appointment, Mr. Nielsen spent almost two and a half years as Director of Sales and Marketing in the Middle East for the BMW Group in Dubai. .
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Singapore. Mr. Lars Nielsen will take over as Managing Director of BMW Group Asia, effective September 1, 2021. Prior to his new appointment, Mr. Nielsen worked as the Director of Sales and Marketing for BMW Group Middle East in Dubai. Two and a half years.
Mr Nielsen (43) has been with BMW Group since 2008, where he started his career as Sales Director for BMW Group Denmark in Copenhagen. Four years later, he moved to Munich, and from January 2012 to December 2014, he took on the role of Market Group North Area Manager for Europe. In January 2015, Mr. Nielsen took over as Sales Director for Southeast Asia. and marketing for BMW Group Thailand until 2019.
The current Managing Director of BMW Group Asia, Mr. Christopher Wehner has moved to Munich, Germany to take up the position of Vice President for MINI Product Management and Launch.
“We are very pleased to welcome Lars Nielsen back to Southeast Asia, this time in Singapore to lead BMW Group Asia. His extensive sales and marketing experience
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