Choosing the Best Financial Services Strategy for Your Marine Dealership
By Dom Zappia, National Area Director, RV and Marine at EasyCare, an MRAA Education Champion
Marine dealerships stand at a crossroads when determining how to handle their financing and insurance operations. This strategic decision significantly influences both revenue generation and customer relationships. By examining three distinct approaches to F&I management, boat dealers can chart a course toward optimal profitability and service excellence.
Three Pathways to Marine F&I Success:
• Option 1: Customer-Directed Financing
Some marine dealers allow buyers to secure their own boat loans independently. This hands-off approach demands minimal dealer involvement but creates substantial missed opportunities. Dealers forfeit transaction oversight, abandon lucrative income streams and frequently deliver subpar customer experiences. Given that established F&I operations typically generate profit margins ranging from 7-8.5% of vessel selling prices, dealers avoiding F&I services are leaving significant money on the dock.[1]
Dealers currently operating without F&I services aren’t permanently anchored to this approach. Establishing connections with community banks and marine lending specialists can enhance customer approval success while creating revenue-sharing possibilities. A logical progression involves collaborating with an external finance partner for 3-6 months to evaluate the market before committing to a comprehensive F&I strategy.
• Option 2: Third-Party F&I Partnerships
Numerous marine dealers collaborate with Financial Service Providers (FSPs) who manage the complete financing workflow. These arrangements typically involve dealers forwarding purchase agreements to the FSP, who then obtain loan approval and coordinate customer documentation, either digitally or through physical paperwork returned to the dealership.
Third-party partnerships deliver distinct benefits. They reduce personnel needs during slower sales periods, streamline documentation on vessel delivery days and produce greater profits than avoiding F&I altogether. Studies indicate that marine dealerships that consistently utilize outsourced F&I services often experience a 20% improvement in financing approvals. These advantages carry expenses, however, as FSPs generally charge fees that can make this option costlier than internal operations over extended periods.
Marine dealers employing third-party F&I can strengthen their position by negotiating reduced fees, establishing direct lender relationships for enhanced deal transparency and demanding comprehensive protection product portfolios. Successful dealers also develop systems to convert cash buyers into financing customers.
• Option 3: Internal F&I Operations
The most lucrative strategy involves employing dedicated staff members who submit financing applications to lenders and manage customer contract execution during vessel delivery. Sometimes this individual serves dual roles as owner, general manager or sales manager, while larger operations hire specialized business managers.
Internal F&I operations deliver superior deal oversight and customer experience while generally producing the strongest profit margins. However, success requires more than simply hiring qualified personnel — it demands a holistic approach encompassing training, support systems and comprehensive product offerings.
Establishing successful internal F&I operations begins with investing in specialized F&I education programs to maintain staff proficiency in industry regulations, sales methodologies and product expertise. Consistent training ensures regulatory compliance while maximizing profit potential through enhanced presentation abilities and customer relationship development.
Even highly skilled internal teams gain value from collaborating with experienced F&I consultants for regular on-site assistance and performance evaluation. These partnerships deliver crucial insights that internal teams frequently overlook, providing unbiased assessments of deal structuring, pricing approaches and customer satisfaction measurements while identifying improvement opportunities and growth potential.
Equally critical is sustaining a comprehensive F&I product catalog that addresses varied customer requirements while optimizing per-transaction profitability. This complete portfolio should encompass extended warranties, GAP protection, maintenance packages and additional coverage products that deliver authentic customer value while generating substantial dealer income.
The most advanced dealers elevate their internal operations by utilizing professional teams to oversee long-term profit participation reinsurance programs. These sophisticated arrangements enable dealers to share in the extended performance of their F&I products, establishing additional income sources beyond initial commissions and substantially boosting overall F&I profitability.
Charting Your Course
Each F&I approach addresses different dealership requirements and development phases. Smaller marine dealers might begin with outsourced services to gain experience, while established operations frequently benefit from transitioning F&I internally for maximum oversight and profitability. With current market pressures, including elevated interest rates and growing cash transactions, selecting the appropriate F&I strategy has become increasingly vital.
Success in any approach requires partnering with suitable lenders, maintaining a complete range of F&I products and consistently educating team members. Dealers should routinely evaluate their F&I performance and assess whether their current approach continues serving their business goals.
Setting Sail for Success
Whatever your present F&I configuration, possibilities exist to enhance profitability and customer satisfaction. Whether through negotiating improved terms with current partners, advancing staff education or shifting to an alternative approach entirely, the most successful marine dealers regularly review and refine their F&I operations.
The F&I department constitutes one of the most valuable profit generators in any marine dealership. According to the 2024 Boating Industry Dealer Benchmarking Report, marine dealers who actively sell F&I products see, on average, a 15-20% increase in gross profit. By comprehending these three approaches and their respective benefits, dealers can make strategic choices that produce both immediate outcomes and sustained growth. The question isn’t whether F&I impacts your profitability — it’s which method will yield the optimal results for your particular circumstances.
[1] IDS Marine Dealership Industry Trends Report 2024
About the Author
Dom Zappia is the National Area Director, RV and Marine at EasyCare. He has been in the industry for 18 years, beginning his career at a dealership where he was first introduced to Finance & Insurance (F&I) as a Finance Manager. Dom’s passion for F&I led him to develop an extensive training program specifically tailored for marine dealerships. His deep understanding of dealership operations has enabled him to customize training to meet the needs of dealers across the nation. EasyCare, focuses on forward-thinking RV and marine F&I solutions. Dom, who has served as a Dealer Week educator, is recognized for his expertise in training, consulting and creating new fixed operations content to help dealers enhance their operations and profitability.
