The automotive industry has shifted tremendously over the past few years. Between COVID shutdowns driving less foot traffic into dealerships and impacting the supply chain, and new car manufacturers entering the market with a direct-to-consumer approach, auto dealers have had a lot to contend with. Considering all these changes, how can dealerships maintain the profits driven by their Finance and Insurance (F&I) divisions?
Finance and Insurance (F&I) has historically been a significant profit center for car dealerships. They can continue to be if the process is brought up to speed with current consumer wants and trends. To maintain your F&I profits, focus on key areas such as customer experience, technology, and education.
Customer Experience Updates for F&I
The internet has made it easy for customers to research what they need to know about the vehicle and any warranty products they’re considering before they step foot into the dealership or pick up the phone to call. The internet has also made it easy for customers to share their experiences with a large audience. Here are some tips to freshen up your F&I customer experience:
- Maintain transparency around your finance & insurance products.
- Be flexible in your approach to educating consumers based on their level of knowledge.
- Understand how to communicate the value of products.
o Example: Most Americans do not have the cash to pay for a $400 repair. This is where a service contract or extended warranty comes into play.
- Consider upgrading your products to account for the changes in technology within vehicles.
o Example: Are computer components included in the warranty, and what errors in those products are covered?
- Build longer customer relationships rather than a quick sale that could turn them off.
o Example: Talk to customers about their goals to determine what products might be best for them
Studies have shown nearly two-thirds of customers who learned about F&I products online were interested in purchasing one or more of those products throughout the sales process. Customers expect updated technology, and these new systems will continue to support both F&I teams and sales teams as they work to close the deal.
Consider investing in:
- Solid platforms compliant with government regulations and internal policies.
- A website that allows your dealership to be a part of the conversation while the customer does their research.
- Centralized, virtual F&I solutions since a whopping 89% of consumers prefer digitalized F&I.
- Videos, education pieces, and brochures that provide the information customers are looking for on F&I products.
Internal Education on F&I Products
Developing a partnership with other departments can help ensure a smooth transition from sales to the F&I process, which improves customer experience. Providing ongoing training for sales employees will ensure they know the products and the benefits they present to different customers. For F&I employees, it ensures they follow regulations and give your customers the most up-to-date information. In addition, when you show employees how F&I impacts key metrics, they can more easily connect the dots and provide better results.
Data has shown that dealerships that evolve with F&I market shifts outperform dealers that are slow to change. It’s essential to keep a pulse on the market and do regular check-ins to ensure you’re providing the best service and have the best solutions for your employees.
Please contact John Comunale via our online contact form for more information.
Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.