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Industry Trends Training

Preparing for a Car-Buying Surge

Contributing Author: John Stephens Executive Vice President EFG Companies
Contributing Author:
John Stephens
Executive Vice President
EFG Companies

As a native Houstonian and an automotive industry executive, I am closely following the news coverage of both the impact of Hurricane Harvey on the Houston area itself, and on the automotive industry within the area. A recent article from Wards Auto caught my eye, with the headline, “Expect Post-Hurricane Car-Buying Surge”. The article details how auto demand will increase in the extended aftermath of the hurricane as people evaluate the damage to their homes and vehicles, and begin receiving insurance payouts.

This is good news for those dealers who are able to quickly replace their damaged inventory with new vehicles. With an estimated 500 dealerships affected by the storm, it can be expected that while it will be a race to update inventory, there will be a period of “downtime” while both dealers and consumers survey their homes and businesses to understand the full scope of the damage.

When a large scaled natural disaster occurs, dealers can typically expect an upsurge in unit sales. However, this means that in addition to addressing inventory concerns, dealers need to prepare their teams to better manage an increase in foot traffic. In the immediate aftermath of a natural disaster, dealers have the time to undergo these preparations, and it’s important that they use that time effectively.

One of the biggest challenges during a car-buying surge is simply servicing the increased traffic. This could mean extending dealership hours, scheduling to have more employees cover the showroom floor for longer hours, and even hiring more sales and F&I team members to help spread the load. In addition to ensuring coverage, it’s important that your sales and F&I teams manage each customer’s time effectively.

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Training

Aligning Dealer and Consumer Needs

Dave Gibbs Training Manager EFG Companies
Dave Gibbs
Training Manager
EFG Companies

The results of a new poll released in May by The Associated Press-NORC Center for Public Affairs Research state that two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency. According to the poll, this spans all income brackets with 75% of people in households making less than $50,000 a year, 67% of those in households making between $50,000 and $100,000, and 38% of households making more than $100,000 all stating they would have difficulty coming up with $1,000 to cover an unexpected bill.

The poll also states that one of the main reasons for this lack of savings is lack of wage growth. 46% of workers said their wages remained stagnant in the last five years, and 16% said they’ve seen salary cuts. During this time, costs for basic needs such as food, housing and health care have risen.

Furthermore, the poll found that a third of Americans would borrow from a bank, friends, or family, or put the bill on a credit card to pay for the unexpected expense. 13% would skip paying other bills and 11% would not pay the bill at all.

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Training

Selling Cash Down

Hollis Goode Regional Vice President EFG Companies
Contributing Author:
Hollis Goode
Regional Vice President
EFG Companies

How comfortable is your sales team with asking for cash down payments on every transaction?

With the plethora of $0 down advertising, it’s become more commonplace for customers to expect to put $0 down on their vehicles. However, as any F&I manager will tell you, this makes it more difficult to secure a loan that is beneficial to both the dealership and the customer.

Take a look at the deals coming to the F&I office. If more than 20% of those deals are for $0 down, then there is a breakdown between your sales staff and the F&I desk.

Granted, the sales team might find it difficult to broach the subject. After getting a “no” once, they might give up, assuming they can’t negotiate. This mindset needs to be overcome in the same way you train your sales people to ask for the sale and negotiate the sale price. The more training and information you give your sales people, the less anxiety they have when asking for the sale, for a down payment, for a trade-in value, etc.

Remember, it is always better to ask than to assume the answer is no. After all, we all know what assuming makes out of you and me.

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