Communicate in the customer's style
Respond to customers in the same manner they reached out to you, advises Marie Knight of Zurich North America. Customers initiate communication in the way they're most comfortable with, she says. So if customers call, give them a ring. If customers text you, text them back. When dealerships respond to customers in their preferred way, she says, "They are much more likely to engage."
Protective Life buys competitor United States Warranty
The parent company of Protective Asset Protection will acquire Florida F&I provider United States Warranty later this year, the companies said last week. The deal is expected to help Protective grow in areas where United States Warranty already has a presence, such as in the Southwest and West, Protective said.
Don't overwhelm customers, keep F&I menu shortOverly long F&I product menus can confuse customers. To keep them in check, dealers should periodically review their F&I offerings against the vehicles they sell and the general wants and needs of their customers to “make sure everything aligns,” suggests Marie Knight, vice president for strategic relationships at Zurich North America.
Subprime loans become prime target for OliverComedian John Oliver devoted nearly 18 minutes of his weekly HBO show “Last Week Tonight” on Aug. 14 to subprime auto lending, loans, which he said closely resembles the buildup to the subprime mortgage crisis that led to the Great Recession.
Ask for more cash down
Aim for this mix: 50 percent of deals with at least $1,500 cash down and 10 percent of deals maximum with no money down, suggests Hollis Goode, regional vice president of dealer services at EFG Cos. “The more cash down, the easier it is to secure financing to cover both the cost of the vehicle and the cost of F&I products,” he says, which can lift F&I product penetration and per-vehicle profit.
Leasing grows but could lose steam, Equifax saysThe leasing market continues to grow but the rate of growth won't last forever. For both banks and finance companies, outstanding lease accounts have posted double-digit growth this year through June, Equifax says.
Outstanding auto loans rise 7% to nearly 78 million in Q2Nearly 78 million consumers had an auto loan in the second quarter, up about 7 percent from a year ago, as U.S. sales of new light-vehicles remained strong, TransUnion said in its latest Industry Insights Report.
Mercedes-Benz Financial repeats atop Power's dealer financing satisfaction studyUPDATED: 8/17/16 1:42 pm ET - adds details Dealers ranked Mercedes-Benz Financial Services tops in lender services satisfaction for the second straight year, data from J.D. Power latest U.S. Dealer Financing Satisfaction Study show.
CU Direct's credit union network leads loan growthCredit unions on CU Direct's lending network as a group reaped higher auto-loan origination growth in the first half of this year than any other auto lender ranked among the nation's top 10, CU Direct said.
Acknowledge customers’ F&I needs
Listen to customers and pitch only the F&I products they need, advises Rasheed Creary, business manager at Sutliff Volkswagen in Harrisburg, Pa. “It’s probably the best practice to make more profit,” he said. “Once [customers] recognize that you acknowledge the need they have, they open up to you and buy more products.”
Toyota Financial's Texas move under way
Toyota Financial Services has begun its move to Plano, Texas. In addition to the relocation, Toyota's captive plans to make other changes, such as hiring locals and building a more open office environment.
VW dealer turns to F&I to offset front-end squeezeHow VW's diesel emissions crisis forced a dealer in Phoenix to improve his F&I business.
Cash customers can be F&I customers, too
Cash buyers can be won over, F&I insiders say. The key is following a consistent process.
Walk across the showroom floor
Don’t wait for customers to come to you; go to them, advises Gerry Gould, director of training at United Development Systems in Clearwater, Fla. “Show people that you care by going out to meet them” on the showroom floor, he said. It will improve the tone of the finance conversation. “It’s a resistance-killer,” he said. “It automatically lowers the customers’ resistance to the F&I process.”
BMW's captive for Americas poised for CEO changeBMW Group Financial Services for the Americas will be headed by BMW executive Ian Smith starting in 2017. The captive's current chief, Ed Robinson, 61, will retire as CEO at year end, a source says.
Publics boost F&I per unit in Q2
All six public new-car retailers posted improved F&I revenue per vehicle retailed during the second quarter. Higher F&I product sales, use of technology in the F&I process and a favorable lending environment drove most of the gains, executives said.
Leasing booms as automakers work to balance residual values, monthly paymentsNew car and truck lease volume has doubled since 2011, and leasing is gaining traction among buyers who were less likely to consider it before, according to a study by Edmunds.com. But the growth in leasing could slow as automakers balance residual values and attractive monthly payments.
N.Y. charges Honda, Nissan dealerships with deceptive F&I product sales
Two more New York dealerships have been charged with deceptive practices involving the sale of credit repair, identity-theft protection and other services. New York Attorney General Eric Schneiderman said SG Hylan Motors and its dealerships at the time -- Honda of Staten Island and Staten Island Nissan -- illegally sold the ancillary products and services to more than 2,300 customers. Some products cost customers more than $2,000 and were added without their knowledge.
What’s in your documents?
Know the fine print, advises Dave Robertson of the Association of Finance & Insurance Professionals. “All parties to the F&I process should be fully conversant with conversion techniques, product knowledge and the governing state and federal consumer regulations,” he said. A seemingly obvious but essential start, he added, is reading the front and back of the funding and aftermarket product documents the customers are asked to sign.
Refunds go out to consumers caught in warranty scam
Customers who were deceived by illegal robocalls and fooled into paying thousands of dollars for fraudulent extended warranties will receive more than $4.2 million from Fereidoun Khalilian and his company, Dolce Group Worldwide, which did business as My Car Solutions, the FTC said.