Thin front-end margins and affordability pressure are pushing dealers to find profit in other parts of the store. On today’s edition of CBT Live, Adam Marburger, President and CEO of Ascent Dealer Services, explains why dealers are leaning harder on finance and insurance (F&I) and fixed operations.
Dealers are leaning on F&I and fixed operations because front-end margins are not where they want them, Marburger said. Premiums did not rise enough in recent years, and record loss ratios caused some lifetime programs to fail. Dealers now focus on building reserves. They also want to sell enough of the right products to keep profit participation programs profitable.
An F&I professional who meets the customer early and invites questions makes the later conversation easier, Marburger said. Short weekly huddles with salespeople on what the products do also build buy-in. Salespeople can then set up the handoff by describing the products as ones customers actually use. Remote F&I can work as well, depending on the market, the process and the technology partner, Marburger said.
Training and culture changes stick only when the dealer principal drives them and accepts accountability too, Marburger said. That includes experienced employees who resist coaching, since what a store tolerates is what it ends up teaching.
