Dealership Corridor
Recently, I had a typical conversation with a dealership general manager about his team’s performance. He struggled to understand why today’s environment makes it more imperative that his sales and F&I staff receive specialized training. With consumers feeling the financial pinch and arming themselves with as much online and comparative research, driving increased F&I revenue is a greater challenge. However, this GM felt like he could handle what he needed to in-house.
Welcome to the New Year rush! At your dealership, you’re trying to move out those older units while negotiating for new models. You’re also connecting with key business partners to review and finalize plans and projections for 2025. And last – but not least – you have a calendar chock full of social commitments with friends and family! But what if I told you that you could connect with more customers and make more in 2025? Let me explain.
If you’re like most dealers in the country, it’s likely you’re struggling to move your metal. As you watch your cost of inventory grow daily, and your bottom line takes a hit, it’s no wonder you might be feeling a little friction. According to Cox Automotive, new vehicles are sitting on lots between 75 and 80 days! You’re not alone feeling the financial pinch.
Consumers are also watching the value of their bank accounts decline thanks to high prices and stubborn inflation. According to Edmunds, negative equity has reached an all-time high. Consumers are rolling over upwards of $6,167 in negative equity in almost a quarter of all vehicle sales. Now, we know that’s an average and there are consumers with higher and lower amounts in the market. But, what happens when they have $10,000 in negative equity on a vehicle they bought at $10,000+ over MSRP? This is just one of the uncontrollable issues putting a damper on unit sales.
And there’s more. Edmunds recently stated that the average down payment for a new car in Q1 2024 was $6,682. Conversely, according to a Time Magazine from March, the average personal savings on hand is only $5,300. So, in order to buy a car, a person has to wipe out their savings AND ask for help? No wonder car sales are slow!
