3-Step Guide for Dealership F&I Success Amid Inventory Shortages

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IHS Markit, 2021 By Q3, the automotive sector already lost a total of 7.4 million light vehicles due to production disruptions. As inventory shortages continue into 2022, dealers across the country are being forced once again to pivot their approach to achieve sustainable success. Faced with ongoing production disruptions, record-high used vehicle auction prices and still considerably high customer demand, many dealers are finding new, unique opportunities within the F&I department to generate additional revenue and fuel their acquisition efforts. This requires dealers to: 1. REIMAGINE THE F&I DEPARTMENT As new and used vehicle prices continue to rise and brand incentives diminish, the F&I department is likely going to feel the impact the hardest. To maintain penetration rates and support overall dealership profitability, dealers need to rethink how they manage and measure success inside the F&I department. Look for opportunities to both support and optimize your F&I efforts, such as: • Re-evaluating F&I pay plans. Remember: Contracts sold at a lower gross are still better than no sale at all. • Marketing consumer-oriented products like wrap-coverage more heavily as more buyers purchase pre-owned vehicles. • Maximizing your CPO program by taking steps like expanding program eligibility and selling pre-owned certifications for customers at reduced rates. • Leveraging the F&I department to maximize the pre-owned acquisition process. Knowing demand is high, go deeper on trades and offer customer lease buybacks earlier. 3-STEP GUIDE for Dealership F&I Success Amid Inventory Shortages Certified pre-owned (CPO) sales reached 1,218,255 units through July, reflecting an 11% year-to-date year-over-year increase. IHS Markit, 2021

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