All of this can signifcantly affect your cash flow and place you in financial jeopardy.
What's the solution? Using the CIT fix can help you maintain cash flow. It may be a little extra work, but the end result will be well worth it.
What is the CIT Fix?
As F&I and Showroom points out, industry experts should now be offering new processes and technology recommendations to keep your dealership operating optimally, and a lot of the work here involves better communication with your entire dealership staff and implementing policies and procedures.
Do your processes use sales penalties to assure the loan contract becomes fulfilled faster? These steps might look harsh in retrospect, but you have to use ingenuity during times when cash flow slows down.
The First Step: "Build-a-Deal" Meetings
Are you meeting with your staff-including upper management-on a regular basis? Do they know what is expected of them for each deal? One of the most important things to do first is to get your entire dealership staff together so you're on the same page about CIT issues.
Work with your F&I development company and your F&I staff to put together a "build-a-deal" process, and make it a priority to analyze each deal jacket from the previous day and make a plan for action.
E-Contracting Option
As an alternate to the above, consider moving to a digital contracting system. Going digital allows you to get away from paper-based systems that only slow down the entire contractual loan process, and can cost you more monthly.
The Second Step: Penalties for Policy Violations
Sometimes CIT issues are the result of complacent behavior in your dealership sales team. You may have to enact a commission penalty to bring faster results on your contracts.
In this case, forfeiting any commissions or other payments until the contract becomes fulfilled can often speed things up.
Devise a pay plan based on the time it takes to fund deals. The higher the commission with the fewer days to get funded, the quicker the results.
Keep in mind this should only become a last resort for obvious reasons. When you work carefully with your F&I department you can find easier roads to keeping your cash flow balanced.
Contact us at Dealership Development, Inc. so we can help you attain a quality program that works for you and your dealership. Our products and consultative services are available to make your dealership become more profitable.