After a year of solid growth in sales that defied predictions of a decline, most analysts are calling for a very challenging 2019 for automotive sales. December was down for most automakers. Economic and political uncertainly coupled with higher interest rates mean that U.S. auto sales could fall by as much as 4% according to some forecasts.
Given the bumpy road ahead, it has never been more crucial to maximize the profit on every sale you make. We thought it would be a great time to repost a piece we did last year about how to make the most out of your F&I offerings
Compelling Products Can Boost F&I Profits
As F&I becomes an increasingly important part of per-vehicle revenue, it is critical to deliver F&I offerings that customers want to buy. Automotive News says that F&I profits now exceed those on new cars themselves. The top public dealership group, AutoNation, now averages $1,789 in F&I profit per vehicle, and some privately held dealerships are easily outpacing that impressive figure.
Increasing your F&I figures does more than help combat shrinking margins on new cars. It can also increase customer satisfaction and traffic at dealerships’ service departments. The best F&I products sell themselves through clear terms, great customer service and outstanding reviews.
Here are some things to look for in F&I products:
- Offers clear and fair terms. Plans that bury exceptions and exclusions in fine print invariably upset customers and are harder to sell. Find providers that clearly state what’s covered and back it up with prompt responses to claims.
- Helps the dealership. Make sure what you’re selling boosts your bottom line, and coordinate with the service and/or collision repair departments to explain the value of F&I products and benefit from any claim-based work.
- Meets diverse needs. One size does not fit all with F&I products. Customers have different budgets and priorities. Those living in high-risk areas may respond to theft plans while families may be more concerned with interior protection. Similarly, different makes have different reliability and warranty protection. Align your sales approach with your customers’ likely concerns and expectations by offering a variety of options. For example:
- Covers either new or used vehicles. Long overlooked, there are a number of F&I products that can increase margins on used vehicles. Products like United Car Care even cover high-mileage vehicles, allowing you to deliver peace of mind to your customers and dramatically increase profits at your dealership.
As margins shrink on new cars, increasing F&I profitability has never been more important. By matching the right products to each customer, you can increase profits and customer satisfaction.
To learn more about the many options in the F&I market, Contact us