What’s more profitable than selling cars? F&I

“Without a doubt, dealers are doing a much better job in selling product than what they used to,” says DealerStrong President Greg Goebel. This has led to consistent growth in profit this year and remarkably exceeding vehicle gross profit by more than double in some areas.

2015 was the first year in which F&I exceeded vehicle sales, however, the trend reversed last year. But, in 2017, F&I has retained its ability to outperform vehicle sales profit throughout the year due in part to shrinking margins.

Why the trend?

Goebel continues, “The dealers are becoming much more proficient, and finance companies are allowing much more significant F&I profit.”

Aggressive sales tactics are a thing of the past and many in the Millennial generation, as well as Generation X, will no longer accept it as part of the car buying experience. So, how does a dealership add to their bottom line via the F&I office without turning away customers?

According to Lloyd Trushel, F&I trainer, “The 1970s strategy of simply overcoming objections doesn’t work anymore.”

These old-school tactics are met with well-informed and skeptical customers. Trushel suggests personal engagement. Building trust is key to providing great service and retaining customers (and customer retention is far more cost-effective than conquest).

What happens if the customer purchases their car and leaves without an extended warranty, protection plan or other F&I product or service from your dealership?

Don’t consider it a lost sale yet.

By continuing to interact with your car buyers after the sale you can entice them to return to your dealership for service. As they do so, your dealership brand builds trust, opening the door to suggest the products they neglected at the time of sale.

It’s never too late to increase profits through F&I even after the sale because continuous, positive engagement increases the likelihood your buyer will return to your dealership for their next car and, therefore, meet with the F&I rep once again.

With OneClick Loyalty, you’ll have a platform designed to engage the customer and forge a relationship throughout the entire ownership lifecycle. Based on industry-leading customer experience algorithms, your dealership can strategically target the right message, at the right time to the right customer. This means you can market your extended warranty or service contract products, add-ons and additional F&I services even after the customer has left the lot and at times in the lifecycle in which they are likely to purchase.

Best of all, this level of engagement gives you the opportunity to turn a car buyer into a customer for life.

With almost 8 in 10 Americans living paycheck-to-paycheck, the idea of a $1,000 repair bill is crushing. Your F&I department can help ease the burdens of unexpected car repairs as the power of OneClick Loyalty continues to build trust between you and the customer.