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!
So, if all signs point to a reduced pool of customers, what can you do to stay in the black? Make the most out of every sale! Obviously, there’s not much room to increase your margin on the front-end of the sale, meaning the F&I office must take center stage.
- Does your team know how to position the benefits of your F&I products?
- Do you have the right mix of products for your customer base and inventory?
- Can your team stay compliant and provide the best customer service possible while maximizing profitability?
These are the questions you need to be asking as we enter the second half of the year. Strategic dealerships are equipping their teams with the training and tools necessary for success in today’s market.
At EFG Companies, we have built a reputation over the last fifty years of providing dealers with solutions to their most challenging problems. From training, compliance and recruiting to product innovation and reinsurance, our team is relied upon by dealerships across the nation for their expertise. We’re more than an F&I provider, we’re your business partner in the retail automotive industry. Contact us today to learn more about how our team can help you achieve your winning strategy.