Used-car shortage creates F&I opportunities
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News Mexico
  • Automotive News China
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • Turn self-driving cars into offices? That'll take 30 years
      The bus stops here
      Last mile
      Self-driving cars might make people sick to their stomachs
    • Lyft plans to file for IPO next week, reports say
      Apple sheds light on safety of its AV program
      GM launches 'Vehicle Locate' app
      Audi expanding regions where drivers can 'ride the green wave'
    • Dealerships owned by ex-NFL stars face collapse, litigation
      Want a luxury car? Try a Kia
      Costly lesson of tortuous legal battle: Get it in writing
      Denny Hecker: A changed man?
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Leading Woman Network
    • PACE Awards
    • CES
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Is Honda's U.K. plant closure the beginning of a Japanese Brexit?
      Tesla introduces 'Dog Mode' to keep pets cool inside the car
      A GM investment in Rivian would send the wrong messages
      Bad policy, worse political strategy on auto tariffs
    • Dealers need to be ready for anything
      EVs will come with economic cost
      Spend money on sales, not stores
      Put it on your bucket list
    • Feb. 15, 2019: EV startup gets Amazon, GM interest
      Jan. 4, 2019 | Bumpy road ahead for Detroit’s automakers and suppliers?
    • Bad policy, worse political strategy on auto tariffs
      Elaine Chao: A speedier path for innovation
      Drivers for ride-hailing services can be a prime source of fixed ops profits
      Dealers' ads for service techs need major repairs to be effective
    • NADA can help fight stair step incentives
      Let dealers invest in innovation, not renovations
      Hackett's vision for Ford is still a blur
      The last temptation of Elon Musk
    • Cadillac falls short on marketing, luxury
      Thank you, Sting, for Oshawa efforts
      Customer-centric approach set Tesla apart
      Deeper issues in tech shortage
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
  • EVENTS & AWARDS
    • Events
    • Awards
    • World Congress
    • Retail Forum: NADA
    • Canada Congress
    • Marketing 360: L.A.
    • Europe Congress
    • Fixed Ops Journal Forum
    • Retail Forum: Chicago
    • Leading Women Conference Detroit
    • 100 Leading Woman
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealership To Work For
    • PACE Awards
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • +MORE
    • Webinars
    • Leading Women Network
    • Custom Features
    • Classifieds
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • Ally: Do It Right
    • Guide To Economic Development
MENU
Breadcrumb
  1. Home
  2. ACCESS F&I
March 24, 2010 01:00 AM

Used-car shortage creates F&I opportunities

Jim Henry
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Now is a perfect time for finance managers to mine dealership databases for sales opportunities, especially to customers coming off loans or leases.

    The reason is the looming shortage of used cars, resulting from the drop in new-car sales in 2008 and '09.

    The shortage is driving up used-car prices. In turn, that means fewer buyers are going to be "upside-down," the term for when the customer owes more on the car than it's worth. A "right-side-up" buyer with positive equity can put the money from their trade-in toward a new car.

    The finance manager who can uncover positive-equity shoppers will have a leg up on the competition.

    "From 2008 to 2010, total car sales will be around 35 million, new and used. From 2000 to 2002, it was 55 million," says Tom Webb, chief economist for Manheim Consulting in Atlanta. "The coming shortage will be in 3- and 4-year-old cars."

    How an F&I manager can help

    Raj Sundaram, senior vice president for the solutions & services group at DealerTrack, says new technology makes it easier for F&I managers to check whether a customer has positive equity in their trade-in vehicle.

    Managers also can check current used-car values for a particular make and model in a given area, with an eye toward selling a potential trade-in, Sundaram said. Both can be done in the time it takes to scan the bar code version of the customer's Vehicle Identification Number, he said.

    "For the first time, certainly for the first time in a long time, you may be talking about positive equity. That's another tool you can use. You can send an alert to the used-car manager, 'So-and-so's car has positive equity,' '' he said.

    Finding scarce used cars

    The shortage of used cars means that dealerships need to work harder to get used cars, said Larry Dorfman, CEO of Georgia-based Automobile Protection Corp., which markets extended service contracts, coverage for certified pre-owned programs, and other aftermarket F&I products.

    Off-lease cars and trade-ins are an obvious source of used cars, but a lot of dealerships don't go out of their way to keep them for resale, Dorfman said.

    Depending on the situation -- especially if an auto lender is offering incentives to help with early buy-outs -- the dealership may be able to pay off the rest of the loan or lease, get the customer in a new vehicle, and still make a profit on the trade-in, he said.

    "The rebates are out there. You can usually convert customers who have got close to, or who have, an equity position," he said. "Right now, even though ideally we should be doing it all the time, it might be a really good time to get into your customer database."

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Digital Edition
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Thumbnail
    Read the issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Now

    Get access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that's vital to your business.

    Subscribe
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our Mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Leading Woman Network
        • PACE Awards
        • CES
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • World Congress
        • Retail Forum: NADA
        • Canada Congress
        • Marketing 360: L.A.
        • Europe Congress
        • Fixed Ops Journal Forum
        • Retail Forum: Chicago
        • Leading Women Conference Detroit
      • Awards
        • 100 Leading Woman
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealership To Work For
        • PACE Awards
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • +MORE
      • Webinars
      • Leading Women Network
      • Custom Features
        • Ally: Do It Right
        • Guide To Economic Development
      • Classifieds
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit