Blog

Get the resources you need to drive your dealership growth and professional development from our team of automotive experts. Partner with your trusted dealership consultants and take your dealership to the next level.

A Proven Way to Procure Used Vehicles and Skyrocket Your Profitability

The automotive industry is still under uncertainty. Chip shortage due to the use of silicon in COVID vaccines and an uptick in demand due to a rise in wages and stimulus checks is drastically impacting the industry. So much so that Production is not able to keep pace with demand and several OEM’s, including Ford and GM have idled shifts as a result. Consequently, it has been a challenge for the dealerships to find a reliable way to procure used vehicles. According to the Detroit Bureau publication, many companies decided to temporarily pause their production due to the semiconductor shortage. For example, Ford had to stop production in Louisville, Kentucky, in December 2020, followed by a month-long pause at a German factory. Stellantis (the new company formed by a merger between Fiat Chrysler and Peugeot) reduced output at factories in the U.S., Mexico, and Canada around the same time. The more your buy, the more you can sell Amidst the production deficiencies of new vehicles, selling used cars is an obvious option for the dealerships to stay profitable. However, it is a big task to find a proven way to procure used vehicles. Many dealerships have demonstrated that the best inventory comes from customers. As a result of their proactive efforts to buy more, they have sold more and reaped higher profits. By buying vehicles from your customers and reconditioning them faster could help boost your profit. However, there is more you can do to increase your PVR. Here are some strategies for you to procure used vehicles, and increase your profit per vehicle: 1. Opportunity in Service Drive: Good used cars are hard to find. Fewer vehicles are going through auction, and those that do are selling at record-breaking prices with questionable quality. Where is the good used car inventory? Have you checked your service drive? You know the customer. You know the quality. The average dealer sees at least 300-400 used cars per month come through service. Are you offering these customers buy-bids and appraisals? Many may be unaware that the value of their vehicle is at its peak. Your guaranteed price may be just the nudge they need to cash in, buy something from inventory, or pre-order something new from you. We know you’re selling out of your service drive. Are you also buying? 2. Offer valuable F&I products Consumers know that in the current market situation finding a desirable vehicle is not easy. So, they value their prices possession and would be interested in protecting it. Products such as GAP can help them find peace of mind in case of theft. Furthermore, GAP will help guard against the threat of negative equity when the market moves back to normal. It is a product that covers a car buyer’s negative loan balance in the event of total loss from theft or collision. 3. How do you sell more products: Explaining the customers that the insurance companies only pay the actual cash value (ACV) of the vehicle at the time of loss. Without GAP, consumers can easily be left owing thousands of dollars on their loans. In other words, the insurance company may not cover the difference between what consumers owe and what the vehicle is worth at that time of loss. Furthermore, this will create the need awareness in customers and help you handle objections that the customer might have regarding the value of the product. 4. Make an offer your customers cannot refuse: It is needless to say, consumers love instant cash offers and instant appraisals. Offering an appraisal and a buy bid on cars that come to your service drive will accelerate your buying opportunities. Notably, capitalizing on service drive will create a win-win situation for both you and your customers. We do the math. You keep the profit. To conclude, being proactive and creative in your ways of procuring used inventory will help you stand apart from your competitors. In addition to the listed strategies, we have more effective and unique solutions to help your skyrocket your profitability. What would an extra $100 per vehicle retailed do for you? How will it impact your annual profit? Do you want to leave that money on the table? We will help you find that money because we do the math to help you make more profit. Reach out to us today!

Read More
car on cash pile

New Car Prices Are at Record High: How Does This Impact Dealerships

Affordability declined to a new low New car prices are at recorded high. As per the COX Automotive and Moody’s analytics, new vehicle affordability declined to a new low on the affordability index this June. In other words, weeks of income needed to buy a new light vehicle rose to 37 weeks compared to 35.5 in May.  Source: Cox Automotive In July, the average new car in the U.S. carried a sticker price of $41,263. As you may know, the reason is the worldwide shortage of microchips that slowed the production of cars. The average sticker price of non-luxury vehicles rose by $353 in June. High new car prices do not necessarily mean low affordability: An increase in vehicle prices does not necessarily imply cars are becoming less affordable. A rise in wages and stimulus checks can mean that people could have more money to spend even though prices have soared. The average financing rate decreased. It led to offsetting some inflation and consequently prevented limiting what otherwise would have been an even higher rise in the monthly payment.  Opportunity for dealers: This situation presents an opportunity for dealers to sell more products to add value to the purchase. When customers pay a high price to own a vehicle, they want to protect their purchases against mishaps such as theft and appearance accidents. Therefore, offering products such as GAP and appearance protection (CilaJet) could reduce out-of-pocket ownership costs. In addition, it may improve the price-to-value relationship for the buyer. Furthermore, products like these will help guard against the threat of negative equity when the market moves back to normal. GAP deficiency chart Additionally, GAP is guaranteed asset protection, a product that covers a car buyer’s negative loan balance in the event of total loss from theft or collision. Insurance companies only pay the actual cash value (ACV) of the vehicle at the time of loss. Without GAP, consumers can easily be left owing thousands of dollars on their loans. Your value: The agent notifies you of total loss claims, creating a sales retention opportunity. Underwritten by Virginia Surety, an “A” rated insurer. Your customers’ value: Insurance deductible covered up to $1000.00 Benefits paid up to $50,000.00. Protection is provided for loan terms up to 84 months, lease up to 60 months. How you sell it: Create needs awareness. Used vehicles are selling at premium prices and are at greater risk for depreciation. In the event of a total loss, the insurance company may not cover the difference between what consumers owe and what the vehicle is worth at that time of loss. Benefits of GAP to customers and dealerships The current market conditions are against the car buyers. For instance, if a customer buys a new car today, the prices could drop about 25%, and then the customer would have negative equity. Explaining this to your buyers would help them understand and value GAP and address their resistance or objections to buying it. To emphasize, it is also possible that the average length of the trade cycle, i.e., the amount of time people keep their cars. Thus, putting people in a position to have a dealer with repairs and maintenance that they might avoid with a shorter trade cycle. It brings in another opportunity for dealers to help their customers manage repairs and maintenance smoothly. You may offering multiple High Mileage Programs available on any vehicle, covering those with over 100,000 miles. Consequently, it would provide much needed peace of mind to your customers. It includes Roadside Assistance, rental benefits, and trip interruption for the entire term of the contract. In addition, prepaid maintenance would be valuable for customers as well as the dealers. It will bring the customers to the dealership and provide dealerships with additional ways to engage with customers and create the possibility of a second sale. Not to mention, more opportunity for trade-ins, which is highly important in today’s market condition. To conclude, dealerships could find opportunities amidst an unprecedented state of inventory shortage which led to high new car prices and low affordability. Offering F&I products such as GAP and Cilajet would increase the price-to-value relationship for the customers while protecting their purchases. We can provide you with custom product packages and training to sell more products. Reach out to us today to get strategic solutions for your dealership.

Read More
top performing dealerships

Claim Your Space Among the Top-Performing Dealerships

What do top performing dealerships have in common? No two dealers are exactly the same in terms of their business and management style. Every dealership has its own culture, environment, set of traits, and mindsets that dealers and their employees bring in. All those factors greatly influence the success of the dealership. Some dealers focus on providing the best customer experience and go the extra mile to help customers, whereas other dealers have excellent synchronization among their departments. As a result, they reap high monetary benefits. Notably, the top performing dealerships have a lot in common.  While the approaches to being successful and metrics to measure performance might vary from dealer to dealer. However, most successful and top performing dealerships share some common traits. The below listed traits could set them apart from their competitors. If you have the grit to develop the following qualities, you could claim your space among the top-performing dealerships. 1. Ready to adapt and embrace new possibilities: Alvin Toffler rightly said, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. ” The dealers who rushed to embrace technology sold more cars in the pandemic-related lockdown. They were successful during the pandemic because they adapted quickly and embraced the change. They found innovative solutions to stay relevant. For instance, they move entirely online, use AI-powered chatbots, and redesign their websites for a pleasant buying experience. In addition, solo test drives, new tools to find customers, virtual F&I, and online paperwork and transactions can contribute to a great customer experience. A wall street article shows how a dealer benefited by embracing technology. “I truly believe we sold more cars last month because we’re finally utilizing technology more efficiently,” said owner Ryan LaFontaine, whose southeast Michigan chain includes 17 stores selling major brands. According to a survey by cars.com, one in five buyers used home delivery for their vehicle in August 2020. Additionally, 66% of the dealerships said they offer home delivery. This 66% of the dealers adapted to the unexpected situation quickly to win new customers. 2. Successful dealerships know how to handle success: In the current market conditions, most dealers are making more profits than the past, so they start believing that it will continue until the end of the year. As a result, they tend to focus on the overall profitability and lose sight of increasing PVR (Per Vehicle Retailed) for each car deal. This perception could make them the victim of their own success. Successful dealers have a common trait of being highly ambitious. They are driven to become better than before, and they do not sit back, relax, and enjoy momentary success. For example, instead of getting comfortable with the current earning and only offering one or two F&I products, understanding customers’ needs is the key. Then,  matching them with multiple ancillary products in the F&I department could considerably grow your PPV (Price Per Vehicle). In other words, the quality of always seeking growth opportunities is the differentiating factor. This is what makes a difference between successful and mediocre dealerships. As said by Frank Sonnenberg, it does not cost more to strive for excellence, but if you settle for mediocrity, it could cost you dearly. 3. Always seeking growth opportunities and taking risks: Successful dealers do not stop at one accomplishment. They strive to do more and attain higher growth. As a result of their appetite for growth, the successful dealers gain a more significant market share. They take risks for maximum return and minimum liabilities. Successful people value courage, plan for the future, prepare themselves, and move forward fearlessly. In contrast, mediocre dealerships do not have a clear vision of where they are headed and how to achieve more. Besides, they are afraid to take risks even when they know that the easy choice could impact them negatively. 4. Ready to overcomes obstacles: So many scenarios are changing rapidly in the auto retail sector. For instance, going digital due to the pandemic and encountering inventory shortages due to supply chain disruption. Dealers who were turned obstacles into opportunities are among the most successful ones. For example, local PNW dealer bought a franchised dealership amidst the global shut-down triggered by the pandemic. He successfully grew his monthly retail from 35 sales to around 120 retails. To achieve this tremendous growth, he stuck to his formula of maintaining a solid inventory and efficient staff that keeps the customers coming back. The dealer learned and adjusted his strategies to overcome the challenges. Consequently, he attained a growth of over 200% in average monthly sales. 5. Strong leadership: The most noticeable trait of successful dealers is their capability to lead. They possess guiding principles and values for themselves and their staff, which act as a compass to guide them towards success. Having a clear vision of where they are and what is next for them to achieve is an essential characteristic of a strong leader. Additionally, discipline to work towards their goal and the potential to lead and motivate others towards growth are the qualities that exist in highly successful dealers. Notably, the successful dealers possess an excellent leadership trait of caring about the growth and development of their employees. Thus, they ensure to invest in their personnel and take necessary steps to help them be their very best. Furthermore, the profitable dealers understand the value of proper training and development. So, they take this aspect very critically. To conclude, the dealerships could attain record success and profitability when they are driven by values such as customer centricity, transparency, empathy towards employees’ growth and development. Additionally, traits such as being open to change, innovation, risk, and a positive outlook to overcome challenges are a recipe for success. Finally, developing a growth mindset of continuously improving and achieving more would help dealers claim a space among the top performing dealerships.

Read More

Are You Struggling to Hire the Right People Amid a Peak in Demand?

Finding and hiring the right people for the job is a challenging task As the businesses return to normal and the Fed is pumping money to revive the economy, the retail auto sector is experiencing a sharp rise in demand. For example, Ford Motors Company sales increased by 65% during April 2021.  On the other hand, the chip shortage has disrupted the global supply and chain, which led to skyrocketing prices of the new and used inventory. Regardless, car shoppers are not expecting to delay their purchases. This means the dealerships need well-trained staff to efficiently assist potential customers. A person who could effectively match customers’ needs, and budget to the appropriate vehicle while enhancing their experience. However, hiring the right people for the job is a long-standing challenge for dealerships. Especially, when the labor market is tighter than normal. Additionally, amidst inventory shortage, the dealers are focusing on ways to unlock new profit centers such as the F&I department and service drives. Then again, identifying and recruiting the people skilled in doing this type of work requires ample resources and time. As per a COX Automotive Study, published on June 21, 2021: 72% of auto dealers say that finding and hiring the right employee is the top staffing challenge. It is considerably grueling in the tight labor market to find a person that fits best in your dealership’s role and culture. Notably, some candidates feel they lack the right skill for the open position. The Cox study found that 32% of job seekers are not interested in dealership jobs as they do not think they have the right skills. Whereas others prefer to stay home due to health risks or are unwilling to change their current position, some are not looking due to childcare responsibilities. Still, others prefer collecting unemployment insurance coverage over earning wages. Consequently, your job as a people’s manager is getting tougher and the task to hire right people is demanding. Data driven recruiting process is the key to identifying the right talent Fortunately, a data-driven recruiting process can help you recognize and hire right people.  The right person contribute to achieving your financial goals while keeping customers satisfied and willing to return to your dealership. The personality and cognitive analysis provide reliable data about the traits and attitude of the candidate. So, you can recruit the person with complete confidence. For example, taking help of the personality and cognitive evaluations will enable you to determine the candidate’s qualities and potential upfront. It helps to understand how the person behaves in a particular situation and what are their blind spots. As a result, you will get direction on coaching to the strengths and guarding against the weaknesses. Undeniably, recruiting the right person is critical for the success of your department and overall profitability. Therefore, utilizing a data-driven recruitment process to find the right fit for the role and team is imperative. Additionally, personality and cognitive assessments help you go beyond the resume. It would enable you to get deep insights to prepare for, and conduct high-quality, meaningful interviews. Furthermore, the assessments help you reach candidates based on the highest predictors of job success. Moreover, the assessment data provides direction to communicate effectively with your hires. The role of creating a supportive work environment in retaining the right people High employee turnover in the retail auto industry leads to constant hiring. Therefore, retention through a supportive work environment is a crucial factor to consider. The Cox Study found that the top driver of employee engagement, which leads to retention, is a supportive work environment, including the following essential elements. The benefit of personality and cognitive assessment to find the right fit Career development and communication are the top elements that influence employee retention. The personality and cognitive assessments help you understand the focus area of training for your employees. In addition, it provides insights on how to better communicate with your employees. In short, an examination such as P.I. Test would help you to not only find the right employees but also contributes towards creating a suitable communication and work environment. This leads to help retain your staff longer and save your valuable time and resources. The importance of professional interpretation of assessment data  The assessments help you not only in hiring the right person but also in helping your people be their best. Remember, a professional interpretation of results is essential in identifying the best fit. In addition, it will lead to an effective hiring and development process and help you become aware of the efficient ways to interact with your hires. What are the person’s strengths, management style, and influencing skills? For example, is the candidate good at analyzing facts before making decisions? Does your new hire have an eye for detail? Are they deliberate, precise, and fit for the immense paperwork involved in the F&I department? The results may give you a brief idea about their personality and potential. But a professional can help you understand how the traits fit with the role and responsibilities and how to make the best use of your employees’ traits.  We can help you implement that in your dealership. With our decades of auto industry experience, we understand how to analyze people’s traits and identify the potential fit for the role. Reach out to us today to help you hire right people in your team.

Read More
ethics & compliance

Ethics and Compliance Grow F&I and Car Sales, and Take Your Profit to a New Level

Tips, Tools, and Strategies to Earn Customers’ Trust and Gain Positive Reviews The role of transparency, ethics and compliance in improving F&I and cars sales: Turning to used car inventory is the need of the hour during the inventory shortage. However, selling used cars could be a tricky proposition for dealers. Transparency, ethics, and compliance help grow your F&I and car sales, and take your profits to the next level.  During their time on the road, cars face several potential hazards ranging from damage to neglect, including accidents, overloading, and often a constant lack of maintenance. Therefore, it is critical to recognize those problems and stay adept at addressing them quickly and affordably. A practical approach is providing dealer certified warranty to confirm mechanical fitness and provide higher satisfaction as well as peace of mind to the customers. In addition, being transparent and honest with your customers and holding the highest standards of ethics and integrity would help you make the most money! To emphasize, failure to do so would reduce customers’ trust in your store, decrease loyalty, and significantly impact your bottom line. A negative reputation leads to negative sales: 90% of consumers read online reviews before visiting a business. 88% of consumers trust online reviews as much as personal recommendations. 86% of consumers hesitate to purchase from a business that has negative online reviews. The above listed stats show that online and Google reviews are a social proof for your reputation and significantly influences customers’ perception and decision-making. Consequently, with the following negative reviews would chase away customers from your dealership to your competitors. Furthermore, A short term gain is never worth as much as a long-term relationship with a customer that on average buys a car every three to four years. So, being honest with your customers would win a good reputation and reviews for your dealership. You will gain greater trust, more customers, and higher profits. The three critical factors could help you cultivate ethical work culture: Over time the unacceptable can become the norm, and the energy for change dissipates. A single person with clarity of conscience and willingness to speak up can make a difference. When even a mid-level or lower-level leader skillfully induces a voice and a vision, others will follow. Surprisingly, it can initiate change for the better—even culture change on a large scale. Practical approaches to ensure customers’ peace of mind: Proactively inspecting the vehicle inventory and informing the customers about the mechanical fitness or reconditioning of the vehicle would help maintain higher customer satisfaction and brand reputation. To emphasize, ethics and compliance in car sales and F&I products positively impacts your image and customer experience. Some of the approaches you can take: Factory Certified Warranty: To bring the vehicle back to the factory standards. The customers would gain higher trust and confidence in buying a factory certified vehicle. Dealer Certified Warranty: Providing dealer certified warranty would provide the similar level of trust and satisfaction to the customers. Additionally, it would build trust and loyalty towards your store. Managing your online reputation to improve car sales: On a different note, customers are more likely to share their feedback when they are satisfied. Request online reviews from your happy customers. The most favorable touchpoint in a dealership to ask for an online feedback is just after a car purchase or service. Sometimes, even requesting to leave a feedback can result in eliciting positive reviews. Text message is a powerful tool as the messages are generally opened within three minutes. Send a text message requesting for feedback. Review request link makes it convenient for buyers to leave an online review. Make use of dealer reviews and reputation monitoring services such as Reputation Rhino and FeedCheck help you listen to your customers and address their issues while building a positive online reputation. Lastly, you can make more profits over the long run by promoting ethics, compliance, and being customer oriented. For instance, assessing customers’ needs, offering valuable products or custom packages and giving control of their buying experience would build trust with car buyers. The key mantra: To win with today’s consumers, you must earn their trust.

Read More
10 things f&i managers should do

10 Things F&I Managers Should Do Every Week: A weekly checklist for F&I managers

Your weekly checklist to become an exceptional F&I manager or director and reap the rewards.  F&I managers weekly checklist to stay on track and profitable: A wise man once said success comes from curiosity, concentration, perseverance, and self-criticism. Yes, the wise man was none other than Albert Einstein. He could not speak until he was four and did not read until he was seven. However, his curiosity and diligence brought him success. If you never failed, you are yet to learn some crucial lessons in life. But if you did, you are smarter than before and know how to better manage a hurdle you stumbled upon earlier. Often, we get caught up in minor details and overlook setting priorities. With that in mind, the F&I department is challenging, as always. It is a never-ending list of to-dos, from handling customers’ questions and objections, endless paperwork to managing your team, lenders, and financial goals. Therefore, creating a weekly checklist for F&I managers could help staying on track and profitable. All things considered, we have handpicked ten essential strategies you could implement every week to help you succeed in your role and exceed your financial goals. Here is F&I managers weekly checklist: 1. Attend and conduct weekly F&I and sales training: Weekly sales and F&I meetings will help you and your team stay updated and efficient. Moreover, conducting weekly training would present you with an opportunity to address issues with current practices through methods such as role-plays. Additionally, taking support of result-driven F&I trainers would build your staff’s confidence and techniques, thus, improving your bottom line. Therefore, conducting training should be a priority on your weekly to-do list. 2. Conduct save-a-deal meetings: Each week, take time to review dead deals with other managers to identify solutions and see if there is a way to go. Review the three C’s of credit. Namely: Character—defined by credit and loan repayment history. Capacity- measures income and ability to service a loan or line of credit. Collateral- asset(s) in this case, the car you have them on. Therefore, a fresh set of eyes and ideas with your colleagues could help you find constructive outcomes and raise your dealership’s profitability. 3. Promote a positive team culture: As the manager, ensure that you have a solid team to help you attain your departmental and financial goals. Building and nurturing a positive work culture could involve simple steps such as setting clear goals, promoting inclusion, and allowing a place for humor. As Dale Carnegie said, “People rarely succeed unless they are having fun in what they are doing.” 4. Maintain and employ a winning mindset: Reading and getting inspired by books and articles would put you on the road to developing a growth mindset. However, it would help if you practiced it every day to accelerate results. For example, when you meet a customer ready to pay in cash, do you feel this person would not be interested in buying F&I products or could not afford to purchase the products? Adopting a genuinely optimistic mindset and renouncing a fixed mindset every day at work would help you grow in your profession while attaining your financial objectives. 5. Reassess market changes and profit centers: Being updated with the market shift and trends and aligning your F&I portfolio to match the customers’ needs require regular consideration. Carefully monitoring your portfolio will keep you adequately equipped to serve your customers and stay relevant in the market. For instance, if lending tightens or interest rates rise, how does that affect dealer reserve? How would the sales & financing process change? 6. Embrace customer-centric approach: The right words at the right time and the right products matching your customers’ needs make all the difference. Significantly, strong customer-centricity with customer-oriented products, would positively influence customer service and ultimately improve customer satisfaction. Hence, every week practice your positive words and values. To emphasize, repetitions aid reinforcement of your values. So, fix a time every week to cultivate and strengthen a customer-centric attitude for guaranteed success. 7. Invest in yourself and your team: Interacting with like-minded industry leaders and investing in rich content- such as podcasts, books, articles would help you stay focused on the game and ahead of the curve. Additionally, meeting regularly with your subordinates to set goals and discuss challenges would make them feel valued and reduce turnover. Moreover, it will help you identify their shortcoming and find solutions to overcome them. You should consider doing this every week for your continued growth. 8. Update tech tools knowledge and review reports: With more young shoppers, using digital tools is critical to your success. Adapting the technology to save your customers time and enhance their experience would add a lot of value to your dealership. In addition, making use of data and reports would help you make better decisions. However, proficiency in new tools and dashboards requires a willingness to learn and continuous practice. Refresher courses and training improve skills and could make you a pro. Notably, setting time aside to pep up your skills would help you move ahead faster. 9. Refresh your relations with lending institutions, VSC provider, and insurance vendors: Many buyers look for financing options when buying a car. While the consumers can get auto financing from a bank or credit union, it could be cumbersome and perhaps on less favorable terms. Having a positive relationship with your lenders will enable you to get special financing approved for your customers. In addition, it could significantly help improve your customer’s experience and satisfaction.  It is essential to consider that building and nurturing positive relationships with lenders, VSC providers, and insurance vendors do not happen overnight. In other words, staying connected with them and maintaining your network would require frequent communication. Therefore, setting up time every week to strengthen your network is a beneficial idea. 10. Give back- Mentor or Coach: With years of knowledge and experience in the auto industry, you could give back by helping junior talent raise their performance

Read More