Time, A Major Reason for Higher PRU During COVID-19


Way back in March when COVID-19 shutdowns rolled across the US (seems like a long time ago, doesn’t it?) dealerships were one of the businesses that took an immediate hit. Showrooms and lots emptied and either transitioned to online sales or closed altogether. It was like a bad 80’s science fiction movie. Society just seemed to stop.

Then something funny happened. The stats from F&I in particular for May showed a higher average income per retail unit (PRU) than BEFORE the shutdowns occurred. How did that happen? What is this all about?

Sales are still slow and customers in many states are still slow to leave their homes. In June alone, sales leveled off and yet F&I did well. But it seems that with lower than usual lot traffic, the F&I managers had something they rarely were afforded before COVID-19.


Time to get to know their customers. Time to ask the right questions to figure out what products they really need. Time to walk through presentations properly and thoroughly. When you are not rushed with deals stacked up at the sales desk, it gives F&I managers a chance to be better prepared to dive into the benefits of each product or package.

F&I managers have to juggle the demands of the sales managers, bankers, and the customers in front of them. It’s tough under the best of circumstances but during a PANDEMIC? Yikes.time

It’s still not ideal to be behind year-over-year in sales and, yes, that impacts the overall monthly profits behind F&I. But maybe the better way to think about it would be that this lull actually can help give the staff a chance to sharpen their skills and slow down a little. That’s when they make the real human connections that result in higher penetration and even higher CSI. 

What’s Selling and What’s Not

There is evidence to say that GAP penetration at some stores is increasing and VSC’s are decreasing. What’s up with that?

GAP seems like an easy sell right now due to the economic climate. With buyers taking on historically expensive cars (if they go new), the lingering uncertainty in the market may make them think twice about what their exposure is if they total the car. Depending on the jobs that buyers have, GAP may really be just the ticket in case something big happens. Don’t be afraid to bring that up in the right situation.

VSC penetration is surprising, however. For the same reason people buy GAP (to shield themselves from a potential economic hardship), VSC’s are there to make sure high-dollar repairs don’t break the bank especially while still making payments. Perhaps buyers are simply willing to take the chance since OEM warranties are longer now than ever.

Consider offering bundles to buyers that include both products with a couple ancillaries and penetration should go up for both anchor products. Call it the Financial Protection Package or something cool. If buyers understand you want to provide them overall protection from the economic climate we are all worried about right now.

Can This Become ‘a Thing’?

If and when sales numbers start to increase and customers begin to venture out to the lots again, F&I may look back on this slowdown as a blueprint for how to maintain a higher PRU by simply slowing down the process even just a little bit. Saturdays will always be insane but maybe there is a way to pace the deals better or tweak the process just enough that they have more TIME to dig deep to sell more.

A slower pace may be achieved by having some ancillaries preloaded into Line 1 like appearance protection. It takes it off the plate of F&I and they can focus on the high-profit, higher commissionable products that require a more thorough sales process. By slowing down and having less to present, you can slow down a bit and really drill down to find the products that the buyer needs and the one that helps push to a higher PRU. 

A Whole New World

These are times when dealers have to bend to the market and to the way buyers want to buy a car. Online car sales help lessen the one HUGE complaint all buyers have (and face it, we all probably have too), no more 4-5-hour ordeal to buy your car. You can pick the car out, have it brought to your home for a test drive, handle the online application, sail through F&I, and have it delivered BACK to your driveway.

Less aggravation, less time.

The stats are interesting but then again, we are all living in interesting times, aren’t we? Take the time while sales are slow to work on best practices revolving around good questioning and consider your local market when constructing your pitch. One product may be hotter right now than another but with the right strategy during COVID-19, you can help raise penetration for all of them.

Did you enjoy this article from Kristine Cain? Read other articles from her here.

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This has been a JBF Business Media production.