Tag: Gabe Aldrete

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Dealership Training

Preparing for a Surge

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

It’s Spring! Warmer weather coupled with tax day refunds equals the potential for a customer surge. While this is certainly good news, one of the biggest challenges could be servicing that increased traffic. Whether it be prospective customers researching a purchase online or potential showroom floor traffic, responsiveness is critical to closing the sale.

To address this challenge, a knee-jerk reaction would be to extend dealership hours, schedule more employees on the showroom floor for longer hours, and hire more sales and F&I team members. Bulking up might seem like the logical solution. However, longer dealership hours can incur non-productive costs, including hourly wages and higher utility bills. Adding more staff on the floor – with longer hours – might increase your response time but it could also increase burn-out with your employees. Hiring new employees is great but your experienced staff might be too busy training those folks to effectively respond to prospective customers!

Work smarter, not harder

When experiencing a surge, the smart action is to step back and evaluate the dealership’s existing processes and measure their effectiveness. I often hear panicked dealer principals exclaim “But I don’t have time to step back! We’re slammed!” What you don’t have time for are lost sales and damaged reputations because your frazzled sales team was unprofessional, or the F&I department hurriedly left money on the table!

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Categories
Economy

Times – They Are A Changin’

Gabe Aldrete Vice President EFG Companies
Contributing Author:
Gabe Aldrete
Vice President
EFG Companies

Bob Dylan said it best – “If your time is worth saving, then you better start swimming, or you’ll sink like a stone.”

We’re over 10 days into the 4th quarter and the news is out. According to Business Insider, analysts expect the year to close out at 17.5 million vehicle sales. Automotive News recently stated that in comparison to last year’s growth, 2016 represents a flat market in terms of vehicles sold, revenue and profitability. Overall, the industry is still healthy. We are still at the peak of auto sales. And, dealers are still very profitable.

However, while dealers have benefited from six years of growth, the positive trends that kept vehicle sales momentum going are puttering out. The pent-up demand that everyone was talking about in 2010 and 2011 is virtually gone. After extensively broadening credit standards, lenders are starting to pull back from subprime. In addition, lenders are concerned about extending credit terms much more without affecting loss ratios.

Dealers who’ve been around for a decade or two are used to the cyclical nature of the industry. Any dealer worth their salt knows that when you get into challenging times, it’s time to look at other streams of revenue. Through the last recession, dealers became very good at pre-owned sales, service, and finance. Now is the time to take those skills and hone them even further. For example, used-vehicle prices are falling once again as a surge of off-lease vehicles enter the market, creating a greater demand for used than for new. It could be time to once again evaluate your floorplan to better determine your ratios of new to used vehicle inventory.

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Categories
Economy F&I

Post-recession consumers are primed for F&I products. Are you taking advantage of this trend?

Gabe-Aldrete-Blog-HeadshotWe have a paradox! More consumers are returning to the dealership to get out of their old vehicles; yet, there are more decade-old cars on the road today than since the depths of the recession in 2009.

If you’ve been following the news for the past two years, or even just the past month, there is not a doubt in your mind that the economy is improving and consumers are returning to dealerships. Both new and used car sales are up, and lenders across all credit tiers are seeing an uptick in loan volume.

According to the latest “Automotive Market Trends” analysis from Experian, the percentage of vehicles on the road predating the 2001 model year has reached its highest level since 2009. In fact, vehicles in that age group made up more than 28.3 percent of all vehicles on the road. To put this in perspective, before the recession, in 2008, that age group only made up 22.1 percent of vehicles on the road.

It’s understandable that during the worst of the recession, consumers held off on making big purchases like vehicles. With mass layoffs and companies filing for bankruptcy left and right, everyone was concerned about jobs and economic stability.

But now that the economy is expanding, shouldn’t consumers be trading up for a newer model?

According to Melinda Zabritski, Experian Automotive’s senior director of automotive credit, “While the growth in early model vehicles on the road is slowing, getting the most out of the vehicle they purchase still appears to be top of mind for consumers.”

Everyone knows that after the recession F&I managers were faced with a more informed and demanding consumer. But what few have taken into consideration is that this could be a good thing. With consumers hyper-vigilant about stretching their dollars, and getting more value from the companies with which they choose to do business, dealerships and lenders have the opportunity to create lasting relationships by aligning with their needs.

The consumers sitting across from the F&I manager know what it takes and the difficulties involved in maintaining older model vehicles. Imagine talking to a consumer who has dealt with three or more costly vehicle repairs within a single year. While they are concerned with current-model dependability, they still expect to keep their vehicles longer than historically normal.

By structuring your F&I products to meet their current needs, you can significantly enhance your dealership’s brand and generate lasting consumer relationships. Picture the relief on a consumer’s face when you tell them that your powertrain warranty will cover some of the most expensive repairs that could have set them back for months with their previous vehicle; or your vehicle service contract comes with roadside assistance so they’ll never be stranded again.

With their relief also comes increased profits for your dealership as well as the opportunity to build a lasting relationship for repeat business. With almost 40 years of experience in structuring successful consumer protection products, EFG Companies knows how to leverage consumer trends to successfully impact your business. Find out how today!