In the car dealership F&I office, your raise will become effective when you become more effective.
A way to do that is to pay attention to the details of your F&I product pricing.
We have all heard the term, “It’s a numbers game,” right? I am sharing the concept of odd-ball pricing. I didn’t create it, but I have used it for years. It helps me move the needle month after month.
This can fit nicely in your tool belt. It allows you to hold more gross profit on every transaction. It plays into the customer’s psyche.
Odd-number or odd-ball pricing suggests the best price is given. As opposed to even-number pricing, it deters consumers from seeking a lower price.
The perception of the deal is that the dealership has got it down to the last penny. The perceived value is higher, and that encourages buying.
For example, instead of asking $4,000 for a vehicle service contract, price it at $3,987. It seems more like a bargain.
I like using a figure with descending individual numbers; after the first number, the rest get smaller. The customer typically focuses on the first number anyway. So, with a VSC, start with a 3 and follow it with 987, not 999.
Because we want our customers to view our products as a good value, this strategy makes sense.
We can’t control a lot of things in the world, or even in each deal. Skip the water- cooler talk about China, bitcoin, the elections, the Dow, tax rates, politics, interest rates and oil prices. Focus on what you can do.
We all get the same 24 hours a day. What we do with it determines how we live. (Justin Gasman, left)
If you’re going to take a swing, increase the likelihood of making contact and completing the sale. The numbers you use help drive the sales.
Try this for 30 days and see for yourself. For your sake and your dealership’s, go forth and profit.
Justin B. Gasman is the financial services director at McCaddon Cadillac Buick GMC in Boulder, CO.