In the current economic climate, where interest rates are high, and vehicle prices are soaring, more and more consumers are opting for F&I products for added protection. Adam Marburger, F&I coach, President, and CEO of Ascent Dealer Services, joins us on the latest episode of Inside Automotive to share further insights on this trend.
Key Takeaways
1. Marburger notes that the current economic landscape, characterized by high interest rates and vehicle prices, has led to heightened consumer uncertainty. In response, consumers are actively seeking ways to protect themselves financially, leading to a surge in demand for F&I products.
2. Specific offerings within the realm of F&I products are quite popular among consumers. Service contracts are highlighted as a cornerstone product, providing customers with peace of mind regarding potential future vehicle repairs. Prepaid maintenance is also a valuable tool for building long-term customer relationships and encouraging repeat business by incentivizing customers to return for routine maintenance.
3. High interest rates can significantly affect dealership profitability, particularly in the F&I department, as they diminish the potential for earning finance reserves. When interest rates are high, lenders offer fewer incentives, leading to difficulty securing finance reserves. However, dealers can adapt to changing market conditions and maintain profitability by implementing strategies like cash conversions.
4. Creating an F&I culture involves effective communication, mentorship, and coaching between sales departments and F&I teams to ensure a seamless customer experience and enhance overall dealership efficiency. Moreover, Marburger encourages dealers to adopt an open-minded approach to talent recruitment for F&I managers.
5. While there is a growing emphasis on digital transactions, particularly accelerated by the COVID-19 pandemic, human interaction remains essential to selling F&I products. Dealers need to balance online presence with maintaining high customer service and engagement levels.
"Retail customers want to buy F&I products, they don't wanna be sold F&I products." - Adam Marburger
