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Business Growth Dealership Training Powersports Market

Navigating Subprime Paper

Glenice Wilder Vice President EFG Companies
Contributing Author:
Glenice Wilder
Vice President
EFG Companies

In the last five years, lenders have been competing for more powersports business. Some loosened credit requirements and extended loan terms, while others evaluated the use of alternative data to more accurately determine a person’s creditworthiness.

However, powersports dealers still struggle getting subprime paper bought. When my team is in the store and we see this struggle play out, we always ask how much effort is being put into maintaining lender relationships. The simple fact is, the stronger the relationship, the more willing a lender will be to negotiate and buy outside of their criteria.

So what does it take to develop strong lender relationships? When pondering this question, think beyond complete and accurate applications. It takes communication and the ability to manage expectations.

Do all your team members know lender criteria like the back of their hands?

It’s never a good idea to randomly submit an application hoping for an approval. This process increases each lender’s Look-to-Book ratio, and angers customers when they start receiving a bunch of denial letters in the mail. Each team member needs to clearly understand each lender’s criteria and only submit loans they know will be approved.

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Business Growth Powersports Market

Make a Plan for the Second Half of 2017

Glenice Wilder Vice President EFG Companies
Contributing Author:
Glenice Wilder
Vice President
EFG Companies

Did the first half of this year leave you cautiously concerned or hopefully optimistic? Depending on your product mix, you either experienced strong sales in the off-road powersports area or a soft market for new retail bikes. Several OEMs also reported single digit declines, and the average wholesale price for on-road vehicles was down about three to six percent. However, the average wholesale price for off-road vehicles remained strong, showing a four percent increase. With this level of uncertainty, what steps should you take to ensure a successful second half of the year?

Savvy dealers will focus on maximizing every possible sale. And that means maximizing profit per unit – PRU. There are many factors involved in calculating the PRU including overhead, OEM rebates and marketing charges, etc. But one clear way to increase PRU is through maximizing F&I and funding as many deals as possible.  So let’s look at the deal after the customer says “I’ll take it!”

Where the Real Work Begins

It’s likely that a customer has entered your dealership to purchase a bike – not a maintenance package or a vehicle service contract (VSC). Chances are, they don’t even know these products exist – or any of the other F&I products you have to offer. The concept of protecting their purchase has probably not crossed their mind. They are simply interested in getting on that shiny bike and hitting the road.

Maximizing the PRU requires giving the consumer a view of the broader picture. Whether you offer simply a VSC and GAP, or also tire protection and overall maintenance, give the customer a clear description of all the products available – and why they are important to them. A menu is a useful way to disclose product offerings effectively and compliantly, increasing product penetration and PRU.

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Virtual F&I

Let’s Get Virtual

Glenice Wilder Vice President EFG Companies
Contributing Author:
Glenice Wilder
Vice President
EFG Companies

I admit it – I’ve gone virtual. I have a lovely Alexa® in my home that will do wondrous things, a Ring™ that will keep my home safe, and a Roomba® that will sweep my floors. Siri® responds to my voice commands and my car parallel parks itself. If they could figure out technology to walk the dog, I wouldn’t have to move a muscle at home!

And now, my colleagues in the powersports industry can go virtual as well – with their F&I. Not sure about virtual F&I? Let’s look at a couple of scenarios to which you can relate.

Everyone knows that F&I is complex. With many powersports dealers operating with a small staff, keeping everyone trained and up-to-speed can be a nightmare. And let’s not forget the potential loss in profitability! This year is looking pretty lean and I’m sure you want to maximize every nickel of margin. Effective F&I can give you that profitability on the back-end. But who’s going to make sure that gets done?

Virtual F&I can be a “hidden” ally, filling the role of a vacant F&I department – or providing support to team members hesitant to explain F&I products. Virtual F&I comes in many forms and functions. Before jumping into this virtual world, it pays to evaluate your dealership needs and the available resources.

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