The R-word. The one no dealer wants to hear and well…none of us want to think about it.
Recession.
And though most economists are saying we’re not in one quite yet, there’s still some that are predicting the worst as we head into the second half of the year.
Now is not the time to stick your head in the sand…it’s a time to be prepared to do things better so that you can stave off any potential crises if they do pop up.
There are four strategies that F&I managers can implement now (if they are not already) that can make potential headwinds this year easier to navigate…
- Circle Back to Training – Having your F&I managers up-to-date on the latest techniques for closing a higher PVR is always important but never more than when the market slows down and customers begin to say ‘No’ more than they say ‘Yes’.
Role playing, walking through recent deals, examining video…all of these are helpful ways to sharpen skills and correct bad habits. Your existing staff is all you need (save your money and skip the expensive F&I trainers coming onsite). Trust that they know what works and what doesn’t.
- Refresher for Compliance – As with training, it’s important to make sure your compliance procedures are updated and working well. It’s about reducing liabilities and boosting the financial security of your dealership.
Weekly or monthly F&I audits, online or digital learning focused on state/Federal compliance guidelines, and even taking the step of consolidating all F&I products under one company can help strengthen your overall compliance health.
- Work on Post-Sale Follow Up – Something that is often missed during the good times is proper post-sale follow up. Those simple calls to recent customers to see how they are enjoying their new car and asking if they have considered adding any of the products they may have turned down when they were in the dealership.
It’s ok to follow up a couple of times. Regular intervals like 3-6-12 months out. It’s a touchpoint that goes a long way to establishing a great relationship with your local buyers and will pay off in increased referrals when times are tougher.
- Upfront, Transparent F&I Pricing – Car shoppers are paying upwards of $1k for a new car payment, so now is not the time to play the shell game in F&I. Don’t pack payments and don’t give a murky presentation on the cost of products and protections.
Be upfront about coverages, financing options that fit THEIR needs, not yours, and if a recession does come, be sure to offer realistic pricing. You may lose a little in PVR but the goodwill you will get in return from fair pricing that benefits the buyer will be worth it.
These are all solid best practices no matter what kind of doom and gloom may be out on the horizon. Treat every customer with the same respect and trust you would want for yourself.
And if the worst does come, your F&I staff will be prepared to deliver solid PVR and high CSI ratings at a time when customers are most sensitive to how they are treated during such a big purchasing decision.
