Many dealerships have begun to rely on back-end profits as vehicle sales margins shrink. Selling finance and insurance products on every deal has become an important goal. But the mission can be daunting when car buyers walk in with cash because the expectation is they won’t be inclined to purchase extras.
Cash buyers can be won over, though, F&I insiders say. The key is following a consistent process.
There’s some evidence cash buyers have made up a steady share of the market over the past few years, according to Tony Dupaquier, director of the academy at Service Group, an Austin, Texas, F&I income development company that provides insurance products, training and servicing solutions to dealerships. This year through July 25, 13.8 percent of deals in Service Group’s network of more than 200 dealerships were cash deals. That compares with cash buyers making up 13.7 percent of the company’s portfolio in the 2015 period and 13.9 percent in the 2014 period. What’s more, those cash buyers have maintained a 50-50 split between new-car purchases and used, Dupaquier says.
So how should F&I managers handle cash buyers?
Treat them the same as finance buyers, experts say.
“Most F&I people don’t give the same effort to a cash customer as they do to a finance customer,” Dupaquier said. “They almost throw up their hands, like, ‘Oh, it’s a cash deal.’”
Sometimes sales staffers negatively affect the cash deal, too, Dupaquier says. If they ask customers to write the check before going into the F&I office, customers often rule out ancillary purchases before the products are even offered because the checkbook is already back in the pocket, he says.