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Business Growth F&I

Your Role in Shortening the Dealership Sales Process

Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
Compliance
EFG Companies

One of the most discussed topics over the last few years within the auto retail industry has been how to shorten the sales cycle within dealerships. Dealers have invested time and money into training initiatives, enhancing their technology capabilities, and in creating an online showroom. Even with all these initiatives, they are still struggling to achieve their goal.

According to a recent survey by eLEND Solutions, 85 percent of dealers say they want a sales process that lasts less than two hours. But, 42 percent report it usually takes three to five hours to sell a car. Now, why is this important to lenders?

One hypothesis is that those dealers who achieve significant reduction in the time it takes to sell a car will see more foot traffic, referrals and repeat customers, meaning more opportunity to increase indirect loan volume. In addition, by acting as a partner with dealers in this endeavor, it further fortifies the lender-dealer engagement, potentially resulting in increased loan volume and longer-term relationships with successful dealers.

It’s always important to remember that dealership success equates to lender success. So why shouldn’t you be invested in your success?

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Enterprise Financial News – Volume 10

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Categories
Compliance F&I

Prepared for F&I Product Compliance?

Steve Roennau Blog Headshot

With the Consumer Financial Protection Bureau (CFPB) quickly ramping up its influence over auto-finance, it is widely expected that F&I products will be the next area of scrutiny. As a lender, there are a few ways to proactively prepare your institution for this next step in CFPB regulation.

The first, and most obvious step is to set limits on how much you’ll fund for the sale of F&I products. Be aware, however, that as the CFPB is reducing the dealer profit from rate markup, dealers will be looking to maximize profit from F&I product sales. They will be looking for lenders who are competitive with their funding options. Look at your entire compensation plan to ensure that it not only promotes consistent pricing, but also fairly and competitively compensates the dealer for the business.

As with all of the vendors that a lender uses, the CFPB is likely to require lenders to vet all product administrators. Savvy lenders are reviewing the contracts to get a better view into the product administrator’s practices, and their customer service standards.