3 Min ReadMay 15, 2023

Four F&I Strategies You Should Start Today

Four F&I Strategies You Should Start Today

In today’s market, opportunity remains strong in the F&I department, especially for products that protect customers’ vehicle investments. Vehicle prices are dropping slightly but still remain historically high while higher interest rates also add to the bottom line for buyers. Customers who’ve spent more than anticipated on a new vehicle need to be introduced early and often to how finance and insurance products can protect a car purchase that they may intend to keep longer as well.

F&I also continues to be a dealer’s best bet to combat shrinking profit margins. The last few years have been great from a profitability standpoint but this year we’re seeing inventory coming back and average transaction prices falling. Strong F&I sales can combat lower front-end revenue. Here are four strategies to invest in today to boost sales.

1. Include F&I in modern retail

A modern retail workflow includes F&I products online and in-store. Presenting menu options earlier online in the buying journey helps capture more F&I dollars by giving consumers the transparency they want, helping set better expectations, and allowing them to move faster through the process once they are in the F&I office. Speeding up the overall process is key to customer satisfaction. The CDK Global 2023 Friction Point Study found that waiting for F&I was the second most troublesome task for shoppers, after price negotiation. In fact, if a shopper had to wait more than 30 minutes for F&I their Net Promoter Score (NPS) dropped nearly in half. That means the longer the sale takes, the bigger the negative impact on the shopper’s likelihood to recommend the store to others.

So, introduce F&I information often and early. The photo carousel on a vehicle inventory page is the ideal place to start. Insert a slide in the carousel with a list of recommended products and services for that vehicle. Include the URL to your F&I product page from the slide and a link in the vehicle description.

2. Recruit sales staff

A skilled salesperson can work in the benefits of specific F&I products before they even get to a discussion about payments. Starting the conversation early is often the best way to prepare a car buyer for potentially higher payments that will enhance the ownership experience. Give sales some skin in the game by incentivizing processes and actions. For example, if you want sales to discuss service contracts 100 percent of the time with all customers, reward them with $5 to $10 every time they complete the process. Reward them again if the customer buys the product.

3. Leverage the trade-in

A customer’s trade-in vehicle is fertile ground for F&I product conversations. During the walk-around take note of any needed repairs – mechanical and cosmetic. Then ask if the customer has any coverage. If they do, they can use those products to repair the vehicle and get a higher valuation. If they don’t, they’re understanding the value those products would have provided. This seeds the idea in the customer’s mind to add products to their new vehicle to benefit during vehicle ownership and when it’s time to trade-in again.

4. Give away freebies

Give away short-term versions of F&I products like pre-paid maintenance. This strategy has several benefits. It makes your vehicle more attractive than a comparable vehicle on a competitor’s lot. It gives the F&I manager an opportunity to offer extended coverage. And it brings customers back to the service bay to increase retention and upsell opportunities, as well as increase the likelihood of that next vehicle sale. According to DMEautomotive, customers that service at a dealership are 86 times more likely to buy their next vehicle from that dealership.

 

It will take vision and cross-department collaboration for dealers to implement these strategies. And while most employees don’t like change, they will appreciate understanding the intent is to expand F&I opportunities to give customers a better ownership experience, counteract shrinking front-end profit margins, and increase service revenue.

Share This

CDK Global
By CDK Global
Staff

Recent Insights

Time to Roll Out Summer Sales and Service Campaigns.

Time to Roll Out Summer Sales and Service Campaigns

Whether you consider summer starting on Memorial Day, the last day of school, or the official start on June 20,...
4 Min ReadJun 13CDK Global
CDK Unveils Inaugural Dealership Workplace Study

CDK Unveils Inaugural Dealership Workplace Study

The automotive retail industry is known for long-held stereotypes about its workers and roles. To say it’s a misunderstood industry...
2 Min ReadJun 11CDK Global
Turn Service Customers Into Sales With C R M Equity Mining.

Turn Service Customers Into Sales With CRM Equity Mining

In the competitive world of automotive sales, dealerships are constantly looking for ways to increase their profits and maintain customer...
2 Min ReadJun 10Amber Good
How Dealership Service Departments Can Enhance the Customer Experience.

How Dealership Service Departments Can Enhance the Customer Experience

The spotlight is shining on delivering great customer experiences. In fact, 84% of dealers plan to increase their focus on...
4 Min ReadJun 6Don Zogg
 Car Buyers Visit More Dealerships in May

Car Buyers Visit More Dealerships in May

May was the second month in a row where 87% of car buyers CDK’s Research Team surveyed said buying their...
2 Min ReadJun 3David Thomas
Are E Vs Ready for the Summer Road trip?

Are EVs Ready for the Summer Road Trip?

The all-American pastime of the summer road trip is alive and well. The Transportation Department reported travel rose to over...
4 Min ReadMay 20CDK Global
Dealers Not Confident in O E M E CDK recently released the Dealers Face the EV Transition white paper, which details the pessimism many dealers feel about the electric future. A clear majority (65%) indeed admit to being pessimistic about EVs, and the paper delves into many of the reasons behind that number including the impact to the dealership’s revenue, consumer interest and more.   We also asked dealers about their confidence level in the EV strategy of their respective OEMs. Whether they hV Strategies.

Dealers Aren't Confident in OEM EV Strategies

CDK recently released the Dealers Face the EV Transition white paper, which details the pessimism many dealers feel about the...
2 Min ReadMay 13David Thomas
Bring Modern Convenience to the Showroom Floor.

Bring Modern Convenience to the Showroom Floor

In our technology-driven world, we’ve taken modern convenience to a whole-new level. Consumers expect to order what they need online...
3 Min ReadMay 9Steven Walker
What Dealers Say About the EV Transition

What Dealers Say About the EV Transition

As the electric vehicle revolution propels forward, dealers across the country are coming to terms with learning, selling and servicing...
1 Min ReadMay 6CDK Global
Three Dealership Accounting Woes and Fixes.

Three Dealership Accounting Woes and Fixes

Nothing can steer your auto dealership off course faster than poor accounting practices. And it’s not just about the importance...
4 Min ReadMay 6CDK Global