Dealerships need to market their F&I departments.
Dealerships promote their deals on vehicles; why not their deals on financing?
Currently, consumers just don’t understand that the dealership can help them get a better rate on their car loan.
Asked where they prefer to secure their financing, 52 percent of consumers said from an outside lender, vs. 48 percent who said from the dealership, a survey conducted in August by DealerSocket and Google found. The survey’s results were part of DealerSocket’s 2016 Dealership Action Report.
When those who said “outside lender” were asked why, 49 percent cited “loyalty to bank” (I assume that includes credit unions.) and 36 percent said “mistrust,” presumably of the dealership. Another 15 gave “credit score” as their response.
Loyalty vs. savings
I’d bet the majority -- though not all -- of that 49 percent would set aside their loyalty to their bank if the dealership’s F&I manager found them a better rate. And my guess is that those expressing “mistrust” think they’re going to get hosed by higher rates at the dealership.
Not everyone gets how much good an F&I manager can do. I asked a DealerSocket official about the fact that dealerships in fact deliver such good rates that the majority of auto lending is indirect, i.e., through the F&I office. In reply, he cited the high volume of special incentives and lease deals offered by captives through the dealership. No recognition of what the F&I office does beyond the captives.
In fact, F&I managers can scout out good rates from far more lenders than the average consumer can. What’s that advertising line? “When banks compete, you win.” Dealerships’ F&I offices force banks to compete.
Put this in your ads, dealers! Highlight those positive online reviews of how the F&I manager saved your customers big bucks on their loans!
When a dealership has a high-performing F&I office that gets positive results for its customers, that is a competitive advantage. Promote it!