We are almost two months into an interesting 2025. Political and economic headwinds are prompting some dealers to dig in for the long haul. Regardless of political or economic conditions, there are opportunities to make more revenue in the first quarter of 2025. Let’s look at what you can – and can’t – control and the opportunities that exist.
January ushered in talk of tariffs against Canada and Mexico, and while currently paused for 30 days, Canadian powersports association Moto Canada reiterated the cross-border interconnected supply chain and reflected that if enacted, there would be a significant impact on all sides. The good news is that powersports dealers’ inventory levels have returned to pre-pandemic levels, so lots are well stocked. Now is the perfect time for savvy sales teams to have informed discussions with their buyers. Make sure your team is well-trained in needs-based selling and not simply pushing the incentivized units.
Persistently high interest rates continue to dampen consumer willingness to take on a large purchase such as a side-by-side or cruiser bike. Recent comments by the Federal Reserve in late January indicated they plan only two rate cuts for 2025, versus the four taken in 2024. With inflation exceeding the Fed’s 2 percent mandate, lenders are unlikely to reduce loan rates. For this reason, every deal must be well-structured and value-rich. Dealers should protect their margins with beneficial service and F&I, and consumers should feel confident that their new purchase is protected for the long term.
Dealers can not control tariffs and interest rates, but they can control how they go to market. It is so important to give consumers a reason to buy from you, versus the competition down the street or across the internet. Differentiate yourself from the first encounter to the service bay. Train your team to make sure every engagement is customer-focused and packed with value. Take the time to truly understand the buyer’s needs – not just today but for the life of the unit. And build a deal that works for both parties. This approach will not only generate short-term revenue but will also pay dividends throughout the customer lifecycle.
Also, don’t get caught in the ‘low-price limbo’ to differentiate yourself from the competition. It’s a no-win situation and will tank any opportunity to generate more revenue from the sale. Many of these purchases are based on a ‘want’, not a ‘need’, so focus on making it easy for the consumer to make the buying decision. Also, not one customer knows what unexpected, life-changing events are down the road. Remind them of the value of products such as GAP or WALKAWAY that can protect their finances.
Now is the time to recognize the difference that F&I products can play in generating revenue in a challenging sales environment. As a dealer, how can you make the buying experience more pleasurable, what tools exist to tie the customer to your dealership for future sales and service opportunities, and what steps can you take to differentiate your shop from the competition down the street? If you approach these questions strategically, you can make more revenue in 2025.
For almost 50 years, you have depended on EFG to help achieve your profitability goals and we are honored by the opportunity. At EFG Companies, we’re more than an F&I provider, we’re your business partner in the retail powersports industry.
