It’s only February, and 2025 has already brought a whipsaw of headlines and a host of actions that could have a significant impact on the retail automotive industry. From talk of tariffs against supply chain critical countries like Canada and Mexico to the cease-and-desist order levied toward the Consumer Financial Protection Bureau, 2025 has started with a bang.
Clearly, you and your dealership have no control over these actions. Even the ability of the automotive industry and lobbying groups to impact administrative efforts seems questionable at times. But you’ve got vehicles on your lots that need to be sold. My recommendation – just get back to basics with fundamentals that you can control.
Selling a new or used vehicle in today’s environment is very different from two to three years ago. Many dealers who ramped up staff after the pandemic operated with fewer units and a buyer who was forced to take what they could find. Interest rates hovered around 3 percent, and vehicle prices were roughly 47 percent higher. Turning a profit on units sold was much easier.
Today, new-vehicle interest rates for prime customers are around 9 percent, and there is plenty of inventory for buyers to purchase the vehicle they want at the best price they can get. To complicate matters, continued economic uncertainty has many consumers pausing large purchases. Your staff no longer has an easy sell – and they may not know how to sell under these conditions.
Dealers who are focused on training staff on a needs-based sales approach will be in a much better position to make the sale. It takes time – and specific skills – to really understand why a customer is shopping for a vehicle and to build the best deal for their unique situation. If you don’t have customer-focused salespeople on your staff now – recruit them! Bring in the right people to meet the current environment. Your team members who performed well during the pandemic may not have what it takes to perform in today’s environment.
Once you have the right staff with the right skill sets and training, empower those people by differentiating your dealership from the competition. Work with your OEMs and captive lenders to maximize incentives. Add F&I products to those incentives that are truly good for the buyer and deliver optimal revenue for your dealership. For example, during these uncertain economic times, debt protection products such as WALKAWAY could mean the difference between a confident customer willing to purchase and an unsure customer who decides to wait…or buy from the competition down the street.
These basics – the right people, the right training, and the right differentiating protection products that truly meet the consumer’s needs — will deliver more revenue. Remember, half of your profit should be captured at the back end of every sale.
As we navigate 2025, look to your experienced partners for the right advice. Whether you need to accelerate new hires, refresh your veteran team members, or re-wire post-pandemic sales associates, EFG’s Road to the Sale class is perfect to prepare your staff to sell to today’s customers to help you make more in 2025. At EFG Companies, we’re more than an F&I provider, we’re your business partner in the retail automotive industry. Together, let’s make more this year.