By now, we’ve all heard the news: the automotive retail market is looking softer. New vehicle sales were down again in April, and in March, Moody’s released their global auto outlook, which was particularly bearish on the U.S. market and vehicle financing. Some dealers may be thinking back to the last market downturn and feeling pessimistic. But the good news is that even with this bearish outlook, the retail automotive space is in a very different place than it was a decade ago.
As a local auto dealership, one of the most important F&I decisions you'll make is which financial lender to use for your auto financing deals. Finding the right lending partner for your dealership means striking a balance between your needs as an auto retailer and the needs of your customers. While the dealer services at larger institutions may offer a wider range of resources to you, your buyers may prefer the more personalized experience they can get from a smaller lender.
As an auto dealership, you know your F&I department needs to run a credit check on a prospect before you sell them a vehicle. You also know that you’re required to check the Office of Foreign Asset Control (OFAC) database make sure your potential customer hasn’t been flagged as a dangerous individual. Most consumer credit check services automatically run a prospective buyer’s name against OFAC’s Specially Designated Nationals (SDN) list. However, you shouldn’t assume that your third-party service will do this. It’s important to ensure that your credit checks are OFAC compliant, and that you know the proper protocol if a customer’s name returns a result on the SDN list.
2018 has been the year of artificial intelligence, as experts across all industries are preparing for the changes this technology will bring to their market.
The auto industry is no different. As autonomous vehicles powered by AI become more widely available, auto insurance―specifically, types of policies and pricing models―will change drastically.
Your customer has found a car they love at your dealership and can’t wait to drive it home. But first comes the hour or more spent in the dealership F&I office.
A strong sales talk track integrates and positions F&I products and services as the answer to buyer questions during the negotiation process. These tracks―also called word tracks, elevator pitches, and sales scripts―are structured to uncover your customer’s needs and concerns, and position your F&I department as the solution.
These Hot Topics Are Taking Center Stage
The annual Digital Dealer Conference & Expo is one of the biggest automotive industry events in the country. Of the 100-plus seminars scheduled during the conference, there are many breakout sessions that focus on direct car sales strategies. However, topics around the modern buyer journey, customer sentiment, digital retailing, and F&I are beginning to take center stage. Here are a few topics to hit at Digital Dealer’s three-day event:
Topics: Digital Dealer 2019
As we know, the F&I office is an important profit center in a dealership. According to Payscale, the average auto finance manager salary is about $69,000 a year, which is a significant operational expense for small to mid-size dealerships. Considering this investment, it’s imperative that candidates have a thorough understanding of the modern sales process, vehicle financing, auto insurance, and F&I products. If you are about to begin your search, it’s time to change up your recruiting and hiring process. We have a few pointers for you to increase the likelihood of finding the right fit.
While gas-powered vehicles are still very much the auto industry standard, more and more consumers are interested in electric cars. Although there’s a bigger upfront investment, both for the dealer and the customer, the long-term environmental benefits and fuel cost savings is appealing enough to justify the price tag. If your dealership has avoided electric cars due to the higher inventory price, you may want to reconsider. There are opportunities to provide solutions to common electric car buyer concerns and increase your F&I profit center through extended warranties and auto insurance savings.
In November 2018, General Motors announced that it would be dropping six of its sedan models in favor of trucks, SUVs, and electric and autonomous vehicles. Discontinued vehicles include three Chevrolets (Volt, Cruze, and Impala), two Cadillacs (CT6 and XTS), and the Buick LaCrosse.
Topics: Digital Retailing