Exercise Your Option$
When your customer’s trading cycle is short, how can F&I still be profitable? Short-term leasing and zero APR contracts can reduce the traditional 54-month trading cycle to 24 to 36 months, with the trade vehicle still under factory warranty. With a trade history such as this, service agreements seem like mission impossible.
While service agreement sales turn the service department engine, if our customers see no value in the agreements, we will not be successful in this venue. We have to look outside the service bay for profit opportunities.
Prepaid maintenance
While prepaid maintenance agreements are not a huge moneymaker, they do keep the customer coming back to the dealership for service. If that service is exceptional, the customer will likely return to the source when it’s time to upgrade to a newer vehicle, and the used department will have a well-maintained piece of inventory to sell.
Accessories
Everywhere I drive I see customized rides. Everyone wants to have something to set themselves apart from the masses. What we drive is one way to make a statement. How the vehicle looks is another way to differentiate with items like custom wheels, tinted windows, and special stripes. If these personal touches are purchased from accessory stores rather than dealerships, we’re missing a big target.
Accessories sales represent a huge income opportunity that is drifting from dealerships–when dealerships are really the first place people should look for ideas. The sales department can make accessory sales, once the sale of the vehicle is secured. An after-market desk can also take care of accessories business. Positioned between the sales transaction and the F&I process, the after-market desk is an ideal entry-level slot for future finance managers.
Accessories sales can also be accomplished in the finance department while the F&I producer loads the deal on the computer. All you need is an accessories presentation book, with separate sections for automobiles, SUVs, and trucks, and categories for convenience, security, entertainment, and appearance.
Most of the accessories can be included in the advance with the loan. Many dealerships also have a special credit card which parts and service will have access to. When the customer asks about how to pay for the items, the dealership can offer the options of finance in the installment contract, cash, or credit card.
Expand your profit alternatives with prepaid maintenance and accessories sales. People like choices, and with choices, sales grow.
Dealer Marketing, September 2006