New Ways Of Creating Income For F&I
Dealerships are always looking for ways to increase profitability and F&I is no exception. The traditional income streams are being limited in funding by lender and customer budget restraints, so dealers are forced to look elsewhere for income in F&I.
Yes, there are those economists who claim that we all have money for the things we want. I would agree that some of us do have the funds for the things we want, but many consumers are in the need mode; they only have funds for the things that they need. Their wants list is still on the back burner, waiting for extra funds.
One revenue stream that is often overlooked is the “biweekly” or “semi-monthly” repayment plan. These options not only create a new income stream for the dealership, they also assist the customer to be in an equity situation faster than a traditional payment regime, because they make 13 payments a year instead of 12. As you know, these plans do not change the retail installment contract. It is all about the method of repayment the customer chooses to use. Some plans are more costly that other plans, some have an immediate income stream for the dealership, and others provide an income stream that begins in about 120 days or so. Another income stream is a credit monitoring plan, which could also be a part of your “identity theft” prevention plan.
Now is a good time for you to talk with your vendors to discuss and hopefully discover new income streams for your dealership. Just because you have not sold a particular product or service doesn’t mean you cannot sell it, nor does it mean your customers will not buy it.
The current economy requires all of us to think outside the box. Ask yourself: Does this new product or service present added value to the customer? If it does, then perhaps you should take a closer look and if it meets all of your quality tests, take action.
Of course, funding for these great ideas will continue to be paramount. Check with your lenders to verify which companies are approved for funding. After all, a sale is only as good as the ability to secure funding.Dealer Marketing Magazine, May 2009, P. 35