Three Tips to Improve F&I Product Sales
New vehicle sales aren’t where the real money is made on the sales floor, and they haven’t been for some time.
It’s the F&I office where new and used vehicle sales become profitable, according to 2017 NADA Data. In fact, net profit on new vehicles continues to drop with a net loss of $421 per vehicle on average! But F&I penetration is holding steady at just over 90 percent, and profits are edging up ever so slightly.
It’s hard to make money selling cars in today’s retail automotive climate. But if the F&I office is doing extremely well, it makes everything worthwhile. F&I advisors are doing a great job with penetration, but just a small bump in average sales per unit could really help.
How can you do that? Here are three tips to improve sales in the F&I office.
Introduce F&I Early in the Sales Process
We’ve talked about it before, and it bears mentioning again. Introduce the F&I advisor before closing the sale. Be transparent about what the customer should expect later on, including F&I products, insurances, and potentially starting the credit approval early on. It breaks down walls later – a hurdle you won’t have to jump.
Focus on the Customer’s Needs!
The needs assessment tells you exactly what the customer would benefit from the most. Maybe it’s not your most profitable product, but it will be important to the customer. Focus on what serves the customer best, then introduce other valuable products. It’s a great way to start the conversation with ‘yes’ as an answer.
Feature Your Worst Seller
There’s always the one thing you don’t like to sell or just can’t do well. Don’t skip it – feature it! Make it one of your highlights in the product demo. Consider it real-world practice. Besides, everything else is second-nature and virtually sells itself. Once you sell your worst seller a few times, you’ll get comfortable adding it to your repertoire.
When the F&I advisor improves their sales per unit, it benefits the advisor but even more so the store. Work on improving F&I product sales, even just slightly, to boost your sales department’s net profits.