Categories
Business Growth F&I

Are You Relevant in the Market?

CalloutThe news is in! According to the latest “State of the Automotive Finance Market Report” from Experian Automotive, vehicle loan delinquencies are down, nonprime, subprime and deep subprime lending volume is up, and we’ve reached a record level of open loan balances.

Everyone is looking to reap the benefits of a healthy market. However, while consumers are relying more heavily on financing and continuing to make their monthly auto loan payments a priority, they are still highly value conscious. With a healthy market, you might think this doesn’t matter as much. Even with increased competition, there are plenty of consumers getting back in the car market. With a solid number of closed loans each month, there’s nothing to worry about, right?

Eric Fruithandler, Senior Sales Executive, Specialty ChannelBut, what if you could do more? What if you could blow that increased competition out of the water? The good news is you can by focusing on what the American consumer wants – value. The value-driven consumer from the recession didn’t go away once they had more money in their pockets. Instead, much like the consumers after the Great Depression, they kept their new outlook and their money. Now, when consumers walk into a dealership, they aren’t just looking for a new car, they are looking for a new experience that puts their needs first.

Now consider your loans and where they fit into this picture.

  • Do your loans reflect the value proposition of your dealership partners?
  • Do F&I managers understand the benefits your loan poses for their customers?
  • Is the loan funding process simple and efficient?
  • After loan closing, do customer relationships foster repeat business and referrals?

The indirect loans that sell the best aren’t necessarily the ones with the lowest rate anymore. Instead, they are the loans that make an F&I manager’s job easier by setting them up with a value proposition. This value proposition starts with their experience securing the loan and ends with the loan’s benefits. Think about the customer experience after loan closing, could that experience be turned into a value proposition?

Put yourself in the shoes of the consumer. What’s important to you when shopping for a loan?

  • Ease of making payments
  • The ability to view quickly your loan balance
  • When calling with a concern, the ability to speak with a real person
  • Mobile banking

While each of these things might seem standard, you would be surprised how many consumers don’t even know how to make their first payment and end up starting their auto loan experience off on a bad foot. With this information in hand, the F&I manager can more easily demonstrate their commitment to the customer as they present a loan with the confidence that the customer will be taken care of.

Beyond what you already do, there is also significant opportunity to relate your loan to dealership needs and customer concerns. F&I managers can tell you, it is not easy trying to sell consumer protection products by themselves. Too many customers walk in with pre-conceived notions about the legitimacy of the products sold in the F&I office. One of the easiest ways to you can help them overcome this setback is with complimentary F&I products, which put the F&I manager in a positive position with their customers, enabling them to increase product penetration with upgrades.

While these products allow consumers to avoid unexpected expenses that may inhibit their ability to make a car payment, they also provide you with increased income potential per loan funded. By offering complimentary consumer protection products, you have the opportunity to increase the relevancy of your loan to dealerships and consumers, thereby increasing the number of your loans and your bottom line.

At EFG, we know how to pair the right mix of products with your loans to achieve maximum success. But beyond product development and administration, we also act as an extension of our client’s business to ensure their relevancy in the market.

Contact us today to find out your loan volume can exceed expectations.

Categories
Business Growth F&I

Preparing for 2014

Eric Fruithandler, Senior Sales Executive, Specialty Channel2013 is almost over and 2014 is upon us!

How did you fare in meeting your 2013 business goals?

How about preparing for 2014 initiatives?

Throughout the year we saw competition heat up as larger lenders got back into the subprime market, forcing underwriting standards to loosen across the industry. As larger banks and credit unions began offering more pre-crash terms and pricing on subprime auto loans, smaller institutions that focus on subprime lending have struggled to retain organic growth and keep their customer portfolio filled with well-qualified customers.

To regain market-share and outperform organic growth in 2014, subprime lenders need a two-pronged strategy to compete with increased competition for loans.

Insulation

The first step is to insulate your business from big lender competition. How do you do this? By focusing on your strengths! Those big lenders are still very wary of the subprime market; if there’s the slightest chance of significant volatility, they will jump ship. However, because you’ve weathered the storm through the Great Recession, you know how to manage more volatility in the market.

Part of the reason subprime auto lenders survived was because of their focus on customer service. By fortifying relationships with dealers and customers, and being flexible in tailoring their loans to meet consumer needs, those subprime lenders found a way to flourish in one of the toughest economic downturns in U.S. history. That strong focus on customer service will set you apart as competition increases. Throughout 2014, continue to ask:

  • How can we increase efficiency and courtesy in responding to applications?
  • How can we provide more value to both our dealership partners and the end consumer?
  • How can we increase transparency within our parameters to ensure our dealership partners know which customers qualify for our loans?

Attraction

The second step in the strategy is to make your auto loans more attractive for greater organic growth. This goes hand-in-glove with insulation as you cannot make your loans more attractive without good customer service. Concentrate on providing tangible value to dealerships by helping dealership personnel present more qualified customers by ensuring they understand your standards, and by responding quickly and efficiently to all applications.

Differentiate yourself beyond terms and pricing with consumer protection products, such as a vehicle return program, a vehicle service contract, or a limited powertrain protection plan. Products like these boost your bottom line, your dealership’s margins and protect the pocket-book of the loan applicant.

By focusing on customer service, flexibility and value, it is possible to tailor your portfolio to perform better in 2014. With over 36 years serving as an industry innovator of consumer and vehicle protection programs, EFG Companies is committed to the continuous development of innovative products and services paired with go-to-market strategies and execution support across a multitude of channels.

Find out how we can help increase your loan volume and performance while providing additional upsell opportunities to accelerate revenue growth. Contact EFG today!