New approaches drive revenue growth for retail automotive dealers
Post-COVID strong consumer financial positions, favorable credit terms, and pent-up demand all spell revenue opportunities for dealer principals in the second half of 2022. While the Federal Reserve has raised interest rates and recession omens linger, consumer financing is still discounted when compared to rates during the Great Recession. For dealers, favorable credit terms spell revenue opportunities for those who strategically manage their inventory purchasing and pipeline sales. Savvy dealers who embrace new selling models and offer pre-order purchasing with flexible financing are positioned to secure more than their share of sales. Digital-first hybrid sales models are expected to continue to gain traction, with appropriately trained sales teams easily moving the customer through the sales and finance processes to final delivery.
Incorporating F&I product education at the pre-order stage can:
- cultivate greater customer satisfaction with the entire purchase;
- increase the total revenue; and,
- protect the financing portion from outside competing lenders.
Bundling the purchase of a customer’s high mileage used vehicle with certified pre-owned protection can:
- differentiate the dealership by giving customers greater confidence in their purchase;
- drive more online and in-store showroom traffic; and,
- set the stage for higher PRU and VSC product penetration.
However, these opportunities fall by the wayside without training that includes all aspects of the sale, including financing, F&I products, and compliance. Dealer principals who invest in their teams will also optimize revenue potential in 2022 and beyond.