The news is in! According to the latest “State of the Automotive Finance Market Report” from Experian Automotive, vehicle loan delinquencies are down, nonprime, subprime and deep subprime lending volume is up, and we’ve reached a record level of open loan balances.
Everyone is looking to reap the benefits of a healthy market. However, while consumers are relying more heavily on financing and continuing to make their monthly auto loan payments a priority, they are still highly value conscious. With a healthy market, you might think this doesn’t matter as much. Even with increased competition, there are plenty of consumers getting back in the car market. With a solid number of closed loans each month, there’s nothing to worry about, right?
But, what if you could do more? What if you could blow that increased competition out of the water? The good news is you can by focusing on what the American consumer wants – value. The value-driven consumer from the recession didn’t go away once they had more money in their pockets. Instead, much like the consumers after the Great Depression, they kept their new outlook and their money. Now, when consumers walk into a dealership, they aren’t just looking for a new car, they are looking for a new experience that puts their needs first.
Now consider your loans and where they fit into this picture.
- Do your loans reflect the value proposition of your dealership partners?
- Do F&I managers understand the benefits your loan poses for their customers?
- Is the loan funding process simple and efficient?
- After loan closing, do customer relationships foster repeat business and referrals?
The indirect loans that sell the best aren’t necessarily the ones with the lowest rate anymore. Instead, they are the loans that make an F&I manager’s job easier by setting them up with a value proposition. This value proposition starts with their experience securing the loan and ends with the loan’s benefits. Think about the customer experience after loan closing, could that experience be turned into a value proposition?
Put yourself in the shoes of the consumer. What’s important to you when shopping for a loan?
- Ease of making payments
- The ability to view quickly your loan balance
- When calling with a concern, the ability to speak with a real person
- Mobile banking
While each of these things might seem standard, you would be surprised how many consumers don’t even know how to make their first payment and end up starting their auto loan experience off on a bad foot. With this information in hand, the F&I manager can more easily demonstrate their commitment to the customer as they present a loan with the confidence that the customer will be taken care of.
Beyond what you already do, there is also significant opportunity to relate your loan to dealership needs and customer concerns. F&I managers can tell you, it is not easy trying to sell consumer protection products by themselves. Too many customers walk in with pre-conceived notions about the legitimacy of the products sold in the F&I office. One of the easiest ways to you can help them overcome this setback is with complimentary F&I products, which put the F&I manager in a positive position with their customers, enabling them to increase product penetration with upgrades.
While these products allow consumers to avoid unexpected expenses that may inhibit their ability to make a car payment, they also provide you with increased income potential per loan funded. By offering complimentary consumer protection products, you have the opportunity to increase the relevancy of your loan to dealerships and consumers, thereby increasing the number of your loans and your bottom line.
At EFG, we know how to pair the right mix of products with your loans to achieve maximum success. But beyond product development and administration, we also act as an extension of our client’s business to ensure their relevancy in the market.
Contact us today to find out your loan volume can exceed expectations.