As vehicle transaction prices continue to rise and customers plan to hold onto their vehicles longer, finance managers will likely be in a prime position for additional product sales — due in large part to the Great Recession.
During the recession, when vehicle sales plunged, the auto industry took action by developing more sophisticated online resources and finance and insurance presentations that continue to evolve today.
"If auto sales are down, it doesn't affect financial products at all," said Karen Rowe, finance director for Elk Grove Toyota in Elk Grove, Calif. "If anything, it gives the finance manager more time with the customer, and we see an uptick in sales. When you have a heavy volume of customers, you stick to a routine because you know another deal is waiting. When sales are slower, you have more time with the customer, and that pays off."
Dealership consultant Tony Giorgione agreed that full F&I presentations that underscore the need for products boost sales.
"It's easy to sell F&I products when you show customers they have a need for them," said Giorgione. "And the longer customers believe they'll keep a car, the more they want to protect them."
The average age of cars and light trucks on the road was 11.7 years in 2017, compared with 10 years in 2008.
Nick Waddell, general manager for Peterson Toyota of Sarasota, Fla., said the sophistication of F&I products and presentations has prompted car buyers to pay closer attention. More than 30 percent of 131 dealers surveyed by Automotive News and Cars.com last month said they aim to increase F&I product sales during a potential downturn.
"I think tougher times lead us to more protection," Waddell said. "I certainly believe that buyers are more financially responsible, looking at the overall picture and understanding, 'I have a car, but there are costs associated with maintaining and repairing that car.' "
Technology and computers fail, even on the most dependable cars, Waddell said.
"Even though Toyota is known for the high-tech safety options, people still want and need basic collision and other protection. They make the decision to protect their investments," he said.
That's where computerized menus, tablets and sophisticated websites — many of which were developed as a result of the Great Recession — come into play.
"The more information we give them, the more comfortable they are making buying decisions," said Waddell. "That won't necessarily convince them they can afford it, but it does give them the tool to make an educated decision in a less contentious manner."