Tailoring F&I to growing Hispanic market
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Auto dealers in markets with large Hispanic populations learned long ago that they often need to communicate with customers in Spanish.
But the growing economic influence of Hispanic consumers in other markets means more dealerships must develop that capability. Hispanic buyers represented 10 percent of all U.S. new-vehicle sales in the first eight months of this year, up 26 percent from the same period last year, data from R.L. Polk show.
Negotiating and closing deals with Hispanic customers can be complicated. While some dealerships have Spanish language menus and bilingual staffs, executing on the F&I side poses challenges.
Toyota Place in Garden Grove, Calif., outside Los Angeles, has a system that works, says General Manager Sam Chaalan. About a third of the dealership's sales are to Hispanic buyers and a third are to Vietnamese customers, Chaalan says.
Toyota Place targets Hispanic customers through TV spots and by offering its Web site in English and Spanish. Its direct-mail literature has Spanish on one side and English on the other, he says.
And once customers visit, the dealership speaks their languages. Salespeople and F&I managers speak fluent Spanish, Vietnamese and Arabic, creating what Chaalan calls the dealership's own "United Nations." Toyota Place also provides contracts and menus in multiple languages.
As dealers look to tap into Hispanic consumers' growing buying power, they must clear language barriers. That's because 60 percent of Hispanic buyers prefer to communicate in their native Spanish, says Marc Bland, head of diversity and inclusion at Polk.
F&I trainer Ron Reahard notes: "The worst thing you can do is not have anybody speak the language. If you're doing 25 percent of your business with Spanish speakers, you need to have someone there." Reahard is president of Reahard & Associates Inc. in Soddy-Daisy, Tenn.
Some stores rely on interpreters. But interpreters filter the information, which makes it hard for each person in a conversation to get the same meaning, Reahard says. "It's hard to explain a visual and inflections. If you can find someone who is bilingual, that's good."
Dealers can start the F&I process online by offering credit applications, payment calculators and lists of products and lenders in Spanish, Reahard says.
Some dealerships also use Spanish menus to explain F&I products. Payne Auto Group in Texas uses ADP's MenuVantage software program that offers menus in Spanish at its eight stores, General Manager Mark Payne says. Although most of Payne Auto's customers are Hispanic, he says, most employees speak Spanish so the dealership doesn't use the option very often. "We tailor the presentation to the customer," he says.
Often dealerships' software packages include multilingual menus that eliminate the need to translate, Reahard says.
Zurich in Schaumburg, Ill., developed its "Take to the Road" system about 10 years ago, says Glenn Roberts, national training and business development manager. It uses short video clips in Spanish and English to explain F&I products so customers get a consistent message. "It lets customers understand what the product does and how it can work for them," Roberts says. "We never thought specifically about reaching out to the Hispanic community. We just said that's a block of people that dealers have to serve and it would be good."
Roberts says Spanish menus would help F&I managers in areas such as Des Moines, Iowa, and Fort Smith, Ark., that have growing concentrations of Spanish speakers. "We're giving them a tool," he says.
Roberts says the Spanish menu is part of the software system and there's no way to track how often dealers use it.
Dealers without Spanish menus can use visuals, such as a drawing describing guaranteed asset protection, to explain products, Reahard says: "They work in any language."
Distinct needs
But it's not just about language.
In addition to providing options, F&I managers must focus on educating Spanish-speaking shoppers, experts say. For instance, many Hispanic buyers are less likely to buy insurance products because that's not something they buy in their home countries, says Felipe Korzenny, director of the Center for Hispanic Marketing Communication at Florida State University. Many people don't know what they're buying, he says.
Dave Robertson, executive director of the Association of Finance & Insurance Professionals, agrees: "You have to be cognizant of the unique needs of the Hispanic market. Many Hispanic buyers aren't aware of the elements of buying and leasing."
Closing the deal with Spanish-speaking customers poses the biggest hurdle for F&I departments, experts say. The issue: Which language do you use for contracts? Only a few states have rules on this.
For instance, Illinois law says deals conducted in languages other than English must include signed statements from buyers indicating they understood the transactions, says Erik Higgins, director of dealer affairs for the Chicago Automobile Trade Association. The association provides the forms, known as "Non-English Language Transactions and Negotiations," on its Web site in Spanish, Korean, Polish and Russian.
But there is no industry-accepted best practice, says Mark Thorpe, owner of the Impact Group in Dulles, Va., an F&I software developer. "Everyone is experimenting," he says. His company's Fusion software no longer offers a Spanish menu option because of conflicting opinions among dealerships, he says. Not all documents are available in Spanish, and converting them all would be expensive because of varying Spanish dialects. He estimates the cost to convert all of the company's materials to Spanish would be $50,000 to $100,000.
Gail Johnson-Brown, an Ally Financial Inc. account representative and former dealership finance director in McAllen, Texas, says the rule is "when you start a deal in Spanish, you have to do everything in Spanish."
Johnson-Brown says most car buyers in McAllen speak Spanish and English. When she worked in dealership sales and finance a few years ago, non-English speaking customers had to rely on a family member or friend to translate. Bilingual employees listened to negotiations to ensure translations were accurate, she says. "We had four to five people in the room so everyone understood what was going on. It's only complicated when people don't want transparency. As long as it's legitimate, it's not complicated."
'A grave concern'
Processing information in English maintains accuracy, Johnson-Brown says. If the salesperson and finance manager speak Spanish and prepare the documentation in Spanish, but the title department doesn't speak Spanish, she says, "How do you make sure everything is right?"
Higgins of the Chicago Automobile Trade Association says members faced similar challenges. "Dealers were running around looking for paperwork that had been accurately translated. Then banks wouldn't accept it because they couldn't read it," he says.
Johnson-Brown says the other challenge of processing paperwork in Spanish is that the customer may be unable to understand it because of dialects. Many Hispanic residents speak a blend of English and Spanish that's spoken but not written, she says.
But as sales to Hispanic buyers increase across the country, industry onlookers say language barriers will no longer be an issue. Instead, dealerships such as Toyota Place will become the model.
Says Zurich's Roberts: "It's for sure that people who don't understand won't buy -- whether it's in Spanish or English."
