Navy Federal Credit Union recently released its latest Cost of Car Ownership (COCO) Index, reflecting that vehicle ownership is nearing record levels – including expenses such as gas, insurance, repairs, and purchase prices. As consumers continue to face numerous economic challenges, dealerships have the tools to tackle those rising costs. Your portfolio of repair, maintenance, and debt protection products has proven to ease the burden of ownership for your customers. Position these products as safeguards against unexpected expenses, thereby increasing your opportunities to boost your PRU.
Position Protection Products as Financial Safeguards
Here’s a snapshot of the costs consumers are facing. From July to August this year:
- New car prices increased by 0.28%
- Used car prices went up 1.04%
- Gas prices rose 1.91%
- Repair costs jumped 5.0%
Consumers are aware of these costs every time they fill up the gas tank or pay their insurance bill. But the cost of repairs lurks under the surface, rising at the worst time, when they experience a mechanical breakdown. Unlike a planned, regularly scheduled oil change, this feels like the “Oh my gosh – I can’t afford this!” kind of repair that blindsides owners.
The rise in repair costs is not a random increase. You and your service department manager are aware of this, including the availability of parts and mounting labor costs. These also take a significant toll on your bottom line. But your customers likely don’t understand how all of this equates to a higher repair cost.
Fortunately, protection products provide financial safeguards for you and your customers if you position them in the right way, starting with understanding your customers’ needs and how to match your products to those needs. Your customer needs to know that vehicle maintenance and repair products not only protect their vehicles, but their bank account as well.
Attaching products such as the Drive Forever® Worry Free Lifetime Powertrain Loyalty Program can literally take away consumer worry, as it focuses on some of the most expensive components to repair. EFG’s MVP® Maintenance Value Program offers discounts on typical maintenance checklist items while easing budgetary burdens for consumers who may be tempted to forego critical car care when finances are tight.
Debt protection products provide safeguards from crippling credit hits in the event of a job loss.
Today’s economic climate and concerns about employment can be a significant barrier to purchasing a vehicle. Or in the event your customer suffers a job loss or other unexpected life-changing circumstance, inability to meet loan commitments can be devastating to both your customer and your dealership.
Industry-leading WALKAWAY® offers vehicle return protection that relieves customers of their lease or loan obligations when unforeseen life events occur. This protection also gives dealers a proactive means of differentiation while strengthening margins and profitability.
Training Is Needed to Successfully Implement These Tools
Unfortunately, these financial safeguard tools do not sell themselves. They require skills to inform, educate, and counsel consumers on their financial situation and economic concerns. Selling these types of protection products demands specific training in the F&I department.
EFG offers this advanced level of training, designed as a consultative, needs-based approach that not only improves F&I employee performance but adds revenue to your bottom line. These skills are not acquired through a casual online course or a conference room lunch-and-learn. Our team of award-winning trainers use a proven method of scenario and role-playing, along with on-the-job follow-up to ensure new skills are effectively deployed.
If you think that spending money on training is the last thing you need to do, you might want to rethink that position. The chart below outlines what a $2,000 training investment yields for a retail automotive F&I trainee – an incremental $206,400 in revenue, per producer, per year! Can you really afford NOT to make that investment?
At EFG Companies, we’re more than just an F&I product provider – we’re your dedicated business partner and trusted advisor, here to guide you through these challenging economic times. You can connect with me on LinkedIn or contact me directly via email at jgordon@efgusa.com