The world has witnessed drastic changes in just a few short months. The economic fallout from the COVID-19 pandemic has impacted nearly 50 million workers since the end of February, according to Mark Zandi, chief economist at Moody’s Analytics, in a recent CNBC report.
Agents should help their dealers take proactive steps to come out of the pandemic recession, and a complete audit of their F&I product portfolio is a necessary step in this readiness phase.
While Moody’s also believes “the COVID-19 recession is over,” automotive agents should be taking this time to review every aspect of their dealer client’s business to ensure maximum readiness for when the economy truly turns positive again.
Everything from reviewing F&I training protocols to refining inventory strategies are top-of-mind for dealers today. What’s more, dealers should be taking this time to review their complete lineup of F&I program offerings and portfolio of services to ensure they have the right makeup of value-added products for customers.
Identifying Vehicle Trends
The right F&I portfolio begins with understanding what people are buying. Sure, incentives are hot for new cars currently, but supply levels and aggressive offers mean the sale of used cars and trucks will dominate car lots for some time. In fact, according to PureCars data reported in TorqueNews2, during the last week of May, used vehicles represented 10 of the top 14 vehicles nationwide.
Many dealers realize the opportunity to cater F&I products around used vehicles. As noted in the 2020 F&I Trends Report3, a survey of approximately 500 dealership executives across the U.S. revealed that 41.7% said more sales of used vehicles represents the greatest opportunity to sell F&I products, followed by more truck sales (36.6%), longer loan terms (28.9%), and more EV/plugin sales (23.7%).
This means F&I products such as vehicle service contracts and ancillary protection products will be beneficial products to offer customers to ensure their cars are protected from damage and expensive repairs.
Many experts believe the worst may be behind us in terms of the quick and sudden damage that COVID-19 did to the economy. The numbers are far from returning to normal, but economists believe growth may be right around the corner. To prepare, agents should help their dealers take proactive steps to come out of the pandemic recession, and a complete audit of their F&I product portfolio is a necessary step in this readiness phase.
Tim Blochowiak is vice president of dealer sales for Protective Asset Protection, a full-service provider of F&I programs offering vehicle protection plans, GAP, ancillary products, training and other services through vehicle dealerships.