what is F&I

What is F&I?

Ryan Daniel

Ryan Daniel

Ryan is the President of Finance Manager Training and has been featured in Yahoo Finance, Tech Times and Harvard.

Here is what you will learn in this article: What is F&I? What does F&I stand for? What are F&I Products? And what does the F&I Department do? Let’s get started!

The F&I department is integral to the health & profitability of a dealerships operations. Dealerships are organized into 4 departments – Sales, Parts, Service and F&I – and each of these departments are directly influenced by the F&I office.

The sales department is in charge of selling new & used vehicles. The service department fixes vehicles and provides routine maintenance. The parts department provides parts to the service department (and consumers) when a component fails. And the F&I Department is in charge of financing, contracting, funding, verification documents, generating revenue, compliance and much more!

Let’s break that down in a little more detail.

what is F&I

What is F&I and what does F&I mean?

F&I stands for Finance and Insurance. The Finance & Insurance (F&I) department gained its name due to the Financial and Insurance responsibilities of the office.

What does the F&I department do?

The F&I Department is in charge of presenting and signing contractual agreements with buyers, speaking with lenders, and negotiating loan terms – among other responsibilities. 

Other important functions such as filing Department of Motor Vehicles (DMV) forms, checking insurance documents, and submitting verification paperwork are handled by Finance and Insurance as well.

Who is in charge of F&I?

This F&I office is the responsibility of the Finance and Insurance Manager, often times referred to as the F&I Manager. 

The F&I manager represents the dealership and negotiates on behalf of the customer and discusses loan repayment options.

Put into layman’s terms – The goal of the Finance and Insurance department of a car dealership is to provide financial aid to consumers, while also serving as a profit center for the dealership.

Wait, did he just say profit?

Yes I did. Let’s discuss that in depth a little more.

How does the F&I Department make money?

The F&I Department creates revenue by selling F&I products to vehicle purchasers.

These valuable products help protect the buyers new investment as well as drive revenue for the dealership. A win/win.

These products are optional, but often make sense for a buyer that wants to protect their new vehicle and keep it looking as good (and driving as smoothly) as the day they bought it.

What are F&I Products?

F&I Products are typically grouped into protection packages and presented by the F&I Manager on an F&I Menu.

These products range from vehicle service contracts, to appearance protections and even insurance.  Various products are available to choose from and many F&I Managers will structure the packages in any way that you wish.

What are some examples of F&I Products?

As mentioned earlier, there are several Finance and Insurance products and the products offered typically vary from dealership to dealership.

For this article, we will focus on five common F&I products. 

Vehicle Service Contract

A Vehicle Service Contract is the most common F&I product offered by F&I Managers.

Many people refer to a Vehicle Service Contract as an “extended warranty”.

Vehicle Service Contracts protect various components of the buyers vehicle for a certain length of time and mileage. The exact components covered depends on the Vehicle Service Contract that is being offered by the dealership.

GAP Insurance

GAP Insurance helps to mitigate financial loss when a person has their vehicle totaled.

The purpose of GAP is to help pay the remainder of a loan when conventional car insurance does not pay the entire amount. 

Key Replacement

Losing car keys is not uncommon, but can be very expensive. Modern vehicles have keys that are embedded with microchips and other expensive technology that makes replacing them very costly.

This F&I product provides a new key that will have the same quality and sophistication as the original one at an affordable price.


An important part of responsible vehicle ownership is routine car maintenance. An effective vehicle maintenance plan lengthens your vehicles life and may reduce the chance of costly repairs in the future.

This F&I product allows a buyer to pre-purchase common maintenance (example: oil changes) at a discounted rate.

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