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Dealership Training

Is Your Team Made Up Of Order Takers or Sellers?

Dealerships and salespeople alike have reaped the benefits of healthy profit margins over the last few years. However, just as the margin pendulum swung deep into seller’s market territory, it’s beginning its backward trajectory into a buyer’s market.

While inflation and lack of inventory have kept vehicle prices high. Interest rates, climbing debt, and lack of affordable vehicles are pressuring more consumers out of the market. According to Experian, during the first quarter of 2023 the average APR for prime consumers fell between 6.40 percent for new vehicles and 8.75 percent for used vehicles. Think about that for a second. If a prime consumer can’t get a rate below 5 percent, what does that mean for nonprime and subprime consumers?

As of 2021, Experian reported that nearly one in three Americans had a subprime credit score. So approximately 33 percent of your customers don’t qualify for an 8.75 percent APR. Their range spans from 8.86 percent to 21.32 percent. On top of the APR issue is rising debt. Because consumers purchased both new and pre-owned vehicles priced well above historical norms for the last three years, those three-year-old consumers are returning to dealerships with significantly less of their auto loan paid off. According to Edmunds’ fourth quarter data from 2022:

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Categories
Data Security

Safeguarding Your Data

The Federal Trade Commission (FTC) Safeguards Rule goes into effect June 9, 2023. Did that date sneak up on you? Will your dealership be compliant, or is your team still trying to figure out what IT upgrades are needed to secure private customer data? Let’s breakdown the Safeguards Rule, see how it impacts your dealership and outline steps to consider while working on this compliance initiative. If you’d like another source of information to share with your team, check out EFG’s latest F&I Talk Outside the Box podcast.

Originally enacted in 2003, the FTC amended the Safeguards rule in 2021, but extended the deadline for compliance to June 9th of this year, giving dealerships more time to incorporate the needed equipment and procedures. Specifically, the new requirements include:

  • Designate a qualified individual to oversee your information security program.
  • Develop a written risk assessment.
  • Limit and monitor who can access sensitive customer information.
  • Encrypt all sensitive information.
  • Implement ongoing security personnel training.
  • Develop an incident response plan.
  • Perform periodic assessments of service provider security practices.
  • Implement multi-factor authentication, or another method with equivalent protection, for any individual accessing customer information.

That’s a lot to absorb! Let’s focus on the key component of data security.

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Categories
Dealer Marketing Featured

Dialing Up Digital

When was the last time you really looked at your website? Have you ever visited your competitors’ websites? Pull up any website today, and you’ll probably see a little more than just an inventory listing and online brochure. Over the last few years, dealers have significantly improved their websites with the online shopper in mind, adding online credit applications, trade-in evaluation tools, payment calculators, and more. However, the proverbial phrase “build it and they will come” does not necessarily apply online. There’s quite a bit more that needs to go into your digital presence to turn website visitors into viable customers.

The Cox Automotive Car Buying Journey research revealed consumer satisfaction with the car buying process declined in 2022 for the second straight year. According to Isabelle Helms, vice president of Research and Market Intelligence at Cox Automotive, “while buying a vehicle is a complicated transaction, it does not have to be frustrating for the consumer. With the right digital tools and systems in place, car buying can be a highly satisfying activity, and as efficient and streamlined as consumers want it to be.”

“While buying a vehicle is a complicated transaction, it does not have to be frustrating for the consumer.”

Bingo! That’s the key. The right digital tools and systems can make the difference between a sale – or a frustrated customer who vows never to purchase a vehicle from your dealership. How do you know whether your dealership has the right digital content?

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