The Changing Landscape of F&I
F&I will face many changes in the lending landscape in 2010. Lenders will continue to cap the extras on the contracts. Lenders will be verifying the insurance backing of the various products and the refund practices of the various policies and services of the F&I department.
The income streams will most likely change in the coming months to include accessories, as these items can be added to the vehicle and increase the value of the collateral. Typically sales will not sell accessories, as the customer usually demands the extra “be thrown into the deal” by the sales manager. Having a change of face present the accessories moves a cost of sale item into an income stream.
Reserve will continue to be a disappearing profit, so my words of council are this: look for other things to present that are viewed as added value to the unit and fundable by the lender. Create an accessory presentation book. According to SEMA (Specialty Equipment Manufacturers Association) the general population still wants to customize their vehicles. Those dealerships not offering specialized wheels, pin striping, tinted windows, and the list go on, are missing an opportunity and inviting their customers to go elsewhere to spend their money.
Some dealerships will tell me they simply do not have the personnel to install the added items. My response to this is sublet the work. You will be the point of contact between the customer and the customization specialist. This is a multi-million dollar industry do you have your fair share?
A new year is upon us, time for making strategic changes to enhance revenue streams. Opportunity is knocking, are you responding?
Dealer Marketing Magazine, January 2010