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Creativity with F&I menus can ease buyer’s worries in 2023

With higher rates comes some opportunities for a more creative approach to help buyers with the overall cost of buying F&I products.

Just when used car prices were starting to come back down to Earth a bit and inventory levels are beginning to rise…you now have had an entire year of interest rate increases from the Fed. Higher prices mixed with higher rates is making payments a source of pain for a large portion of the car-buying public.

F&I has enjoyed record-high PVR, though, in 2022 with some stores topping $2k per deal. At the intersection of higher cost to purchase and higher interest rates is a BIG win for dealer revenue.

Great for dealers, not so great for buyers.

With higher rates comes some opportunities for a more creative approach to help buyers with the overall higher cost of buying F&I products on the back of a higher payment.

You may have buyers who want ancillaries like interior/exterior, PDR, and alloy protection but due to the higher payment they may be facing they may feel it’s just too expensive. One way to help give them what they want and still preserve the ability to keep PVR and penetration up is to create packages.

Make the package a smaller cost when taken together (which shouldn’t be a problem if your administrator offers low backend costs anyway).

If your dealership already offers graduated packages in F&I, chances are it’s only a couple. Too many packages could confuse the buyer and that the straight ‘up and down’ menu may be the better way to go.

F&I menus should not be difficult to navigate and there may be a better option when it comes to making sure you have the packages that make it easy to take one versus none.

Packages for every financial scenario 

If you have a large enough F&I product offering, your dealership could simply build out 2 or 3 different levels of ancillary packages to include all the most popular and important products to keep their new-to-them used car looking good for their potential trade-in down the road.

Buyers want choices and this gives them exactly that.

Here’s a few examples of what your packages could look like:

  • 3 products – $495
  • 4 products – $695
  • 5 products – $895

Most of us, when presented with three graduated levels of a service with adjusted pricing to match, will almost always pick the middle or higher package. Why? No one wants to look cheap or like they cannot afford the middle or higher priced package.

Offer the packages or bundles for a price that makes sense to the buyer…not too high, though, as you could make them nervous. After all, remember the record-high monthly payments are right now. It’s best not to scare them off from an appearance protection package that’s too expensive to be added to the loan.

Everyone reacts well when given choices and that’s the most important thing…it’s not a take-it-or-leave-it proposition. You are presenting them with graduated packages based on the level of protection they need and that can be a powerful way to help sell more products.

Will it make as much as selling them separately? No, but it can give you the best chance for a ‘yes’ to something rather than nothing at all.

Customers will appreciate the ease of looking at a bundle that makes sense based on their driving habits and being able to quickly see the value without a long, protracted sales pitch. It’s a ‘here they are…pick the one’ scenario that takes a ton of pressure off F&I.

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Kristine Cain
Kristine Cain
Kristine Cain is a contributing writer for CBT News. She has over 26 years of experience in the automotive industry specializing in F&I and B2B sales.

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