In a push to increase revenue, Sonic Automotive Inc. set a sales target of two products per transaction in the finance and insurance office.
The companywide average for Sonic's 145-franchise network is currently 1.15 products per vehicle sale.
Like many other auto retailers, Sonic had lower F&I revenues last year as new vehicle sales declined. Now it is pushing product sales, but it's trying to streamline the process to avoid inconveniencing customers. Lengthy sales presentations and aggressive sales tactics can create unhappy customers.
Sonic believes it can strive for growth, as well as customer convenience.
"We have plenty of stores over the two-products-per-car mark now," says Jeff Dyke, Sonic's executive vice president.
Dyke says Sonic hasn't seen an increase in contract cancellations or a decline in customer satisfaction scores at the stores that average two products per deal. The company has substantially reduced the amount of paperwork a customer must sign to speed up the F&I process, he points out.
"We are in the middle of laying out plans to take our F&I contracting to a paperless transaction," Dyke says. "We will also use different technology in the future to support this process that will include a different menu format."
Sonic reported $41 million in F&I revenues in the first quarter, up from $32 million a year ago but lower than its $44.8 million revenues in the first quarter of 2008.
Its F&I revenues per new and used vehicle retailed had declined over the last two years. In the most recent quarter, Sonic averaged $947 per unit retailed, down from $1,001 per unit a year ago and from $1,123 per unit in the first quarter of 2008.