The most effective F&I practices to use this year according to the experts

The F&I practices used in the auto industry have changed significantly since the start of last year, as dealerships refined their offerings to adapt to a new market landscape. However, since the transformation has been so drastic, many store owners are still uncertain which methods will work best in 2023.

JM&A Group is an F&I solutions powerhouse, and has been helping dealers navigate industry trends for years. On this episode of Inside Automotive, Chris May, JM&A’s Director of Product Innovation and Intelligence, and Beau Jarrett, the Vice President of Sales, join host Jim Fitzpatrick to discuss the best financing and insurance products and services dealerships can offer in 2023.

There are four standout trends on dealers’ minds when it comes to F&I, says Jarrett. The first being the new FTC Safeguards rule, followed by macroeconomic conditions, inventory, and emerging EV strategies.

To navigate and prepare for the FTC’s changes to take effect, it is essential to have a dedicated person inside of the dealership to monitor compliance consistently. Front-line employees must also ensure they are taking the necessary steps to protect everyone. Oftentimes, dealers have such a robust policy, that employees can’t follow it properly. Ensure that your policies make sense for your organization. NADA also has several resources to assist you with compliance.

Training is just as important, says May. JM&A has seen an uptick in requests for compliance-specific support, underscoring the importance of staying within the correct regulatory framework.

“It’s a group mindset and I think that’s probably the biggest thing over the next six months—is that everyone has a baseline understanding of what their role is in the dealership as a whole,” May says.

There are economic headwinds dealers should also consider. High interest rates are affecting PVRs and the overall purchasing power of the consumer. There could be some training opportunities in this area, says May. In fact, while staff turnover is low in the industry at 34%, it’s likely that you have many new faces in the store who could benefit from reviewing the basics.

Inventory is still top of mind for most dealers as they settle into 2023. While days’ supply in returning, product mix is still an area of concern.

“On the used side, if I could give advice to any dealer today, it would be come up with a very strict policy for your days to turn, and stick with it,” says Jarrett. “It’s going to be the number one thing you can do to protect yourself from the index fluctuating.”

Evolving EV strategies weigh heavily on the minds of many dealers. Some forecasts predict EV sales will increase to 30% by 2030. However, since the Inflation Reduction Act was signed into law, forecasts are increasing to 40—50%. In light of these trends, there are some foundational things to start today, like product knowledge and training.

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