Auto dealers of every size should review every aspect of their business to ensure maximum readiness for when the economy turns positive again.
Everything from reviewing F&I training protocols to refining inventory strategies are top-of-mind for dealers today.
Dealers should also take this time to review their lineup of F&I offerings to ensure they have the right makeup of value-added products for customers.
It starts with identifying vehicle trends.
The right F&I portfolio begins with understanding what people are buying. Sure, incentives are hot for new cars currently, but supply levels and aggressive offers mean the sale of used cars and trucks will dominate car lots for some time.
According to PureCars data, used vehicles represented 10 of the top 14 vehicles nationwide in the last week of May.
Many dealers realize the opportunity to cater F&I products around used vehicles. As noted in the 2020 F&I Trends Report, a survey of about 500 dealership executives across the U.S. indicates 41.7% said more sales of used vehicles represents the greatest opportunity to sell F&I products, followed by more truck sales (36.6%), longer loan terms (28.9%), and more EV/plugin sales (23.7%).
This means F&I products such as vehicle service contracts and ancillary protection products will be beneficial products to offer customers to ensure their cars are protected from damage and expensive repairs.
In a recent Protective Asset Protection survey presented to 1,500 dealer professionals, 29% said their current F&I products are “too much of an administrative burden” and “don’t offer enough margin for the dealership.” (Tim Blochowiak, left)
The numbers are far from returning to normal, but economists believe growth may be right around the corner again. To prepare, dealers should be taking steps to come out of the pandemic recession. That includes a review of their F&I product portfolio and programs.
Tim Blochowiak is vice president-dealer sales at Protective Asset Protection, an F&I provider.
