You offer the same financial options for identical brands in different cities but can't capture more than 50 percent of financing in one town while the other hums along at 90 percent.
Before you blame the staff, take a hard look at the communities in which you do business.
"We run 55 to 60 percent finance penetration in a strong credit union market versus 90 percent finance penetration on the same brand in a less credit union market," says Sharon Shults, platform F&I director at Central Automotive Group, which has nine dealerships in Texas. "If you are in a market where credit unions are strong, and they have billboards at every freeway exit advertising extremely low rates, the public is more conditioned to expect ... those rates. It is an 'in your face' approach. This brings up the topic of rate in many cases before the car is even sold with the salesman."
So how to compete?
The first step, especially if you're opening a new store, is to contact other area dealers, says automotive retail consultant Max Zanan, author of Perfect Dealership: Surviving The Digital Disruption. They will share their insights on area financing and their specific rates of in-house financing. You should also analyze other community particulars, including the largest employers, credit union rates and other variables that may play into residents' auto financing decisions.
"I would get the financing contracts [from the credit unions that offer auto financing in the area], Zanan says. "And I would go through those contracts with a magnifying glass to completely understand what my potential customers are dealing with. And if you [understand those] terms, you may be able to maybe come up with an alternative solution. When the customers come to the showroom, you should explain to them the benefits of financing through your dealership. But again, you have to do your homework first."