Enhancing the F&I Performance
Publicly owned dealership groups can provide useful F&I performance comparisons for other dealerships.
Recent per-vehicle-retailed F&I-revenue averages for the six public groups ranged from $1,127 to $1,649.
Sometimes, it’s a little more training, smarter hiring and better utilization of technology that can explain why some dealerships consistently outperform others in F&I. Those enterprises also likely use reporting tools to more deeply examine F&I results, analyzing the data to discover where lost opportunities are eroding PVR and product penetration.
reports members’ service-contract penetration is about 40% of new-car sales. How is your dealership doing against that metric?
Three reasons can explain lower PVR and penetration:
- No commitment or training to promote aftersale products, especially vehicle service contracts and GAP insurance.
- F&I processes that deprioritize or neglect menu use. Last year, our company pulled data from 270 dealers using leading e-menu software. Dealers using a digital e-menu system were realizing $538 more new-car PVR and 12% and 10% lifts in VSC andGAP penetration, respectively.
- Poor ability to draw out important personal information from customers about their driving habits, concerns, and attitudes. By gaining this insight, F&I managers can better identify risk and behavior triggers that should lead to a more appropriate and focused product presentation.
These challenges are solvable. Dealers who don’t take advantage of those solutions bring into question their resolve for improving their F&I profitability. If they were concerned, they’d soon realize an increase in F&I activity and results.