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In the ever-evolving landscape of auto dealerships, diversity isn’t limited to the range of cars in stores; it extends to the workforce as well, encompassing a wide variety of backgrounds and generations. From Baby Boomers to Gen Z, each generation brings its unique flair to the showroom floor. Does multi-generation workforce in dealerships play a role in forming a unified team and catering to a diverse range of customers? Let’s take a closer look, and you be the one to say! Workforce generational breakdown Source: Purdue via John Hopkins From Boomers to Zoomers: The varied talents each generation adds to the mix • Baby Boomers (Born 1946–1964): Esteemed for their reliability and rich professional experience, Boomers excel in roles that leverage their interpersonal skills and industry knowledge. Their dedication to quality and customer service sets a high standard, inspiring trust and loyalty from both colleagues and clients. • Gen X (Born 1965–1980): Known for their strong analytical skills and independence, Gen Xers are adept at bridging traditional and digital work methods. In addition. they value stability and work-life balance and are proficient at problem-solving, making them invaluable in navigating complex challenges and driving operational efficiency. • Millennials (Born 1981–1996): Millennials value flexibility, growth, and purpose in their work, extending beyond digital expertise to embody adaptability, teamwork, and a strong ethical compass. Furthermore, they champion collaborative environments and sustainable practices, driving positive change and innovation across all facets of the dealership. • Gen Z (Born 1997–2012): Eager for instant feedback and skilled in the latest digital trends, Gen Z emphasizes authenticity and engagement. They bring a forward-thinking mindset focused on innovation and ready to reshape the customer experience with fresh perspectives. The power of age diversity Diverse perspectives: Every generation sees their job roles through a different lens, enriching the dealership with various insights. This blend of experience and fresh ideas pushes teams to innovate and tackle challenges with a well-rounded approach. For example, Millennials grew up during a time of rapid technological change, economic fluctuation, and global events such as the 2008 financial crisis. These experiences have made Millennials adaptable to change and have taught them to navigate change more fluidly and to communicate effectively under stress or in rapidly changing environments. Learning and mentoring opportunities: A multi-generation workforce in dealerships — rich in age diversity offers possibilities for growth. Experienced professionals such as Boomers and Gen Xers can mentor newcomers on the importance of building networks and strong connections that are beneficial for repeat sales. At the same time, younger employees share the latest trends and technologies, creating a continuous learning cycle. In addition, Gen Z acknowledges the value of mentors as they need guidance, and a dealership providing it in the form of a mentorship program could increase the retention of top talent. Connections and well-being: A multigenerational team mirrors a community where connections cross age boundaries, enhancing job satisfaction and fostering a supportive work environment. For example, Gen Z’s understanding of modern wellness practices and resources can lead the way in adopting new stress management and well-being enhancement strategies, benefiting teams across all generations. Navigating challenges of a multi-generation workforce in dealerships Negative Stereotypes: In a dealership, stereotypes can hamper the seamless flow of ideas and sales strategies. Cutting through these preconceptions with open minds and valuing what each generation brings can lead to a more united and productive team ready to meet the diverse needs of our customers. Communication issues: Effective communication is the cornerstone of any successful team. Recognizing and adapting to the preferred styles of different age groups bridges gaps and enriches our interactions, making for a more cohesive and innovative team environment. For example, Gen X responds well to straightforward communication and values autonomy — avoid micromanaging them for optimal engagement. Varying work styles: Embracing each generation’s work style allows us to transform potential conflicts into collaborative strengths. This flexibility leads to a more dynamic and adaptable work environment with practical approaches to problem-solving and attaining common goals. For example, Baby Boomers and Gen Xers are known for their rugged individualism and hardcore work ethic, and Millennials and Gen Z value flexibility and wellness. Tips for harnessing the power of diversity Kick off your sales meetings with a motivational touch—share a brief, inspiring anecdote or a quick video (5-10 mins) tailored to engage your team’s diverse attention spans. Follow up with a swift questionnaire to capture the thoughts and motivations of your team, reinforcing their ‘why’ and focusing their attention. Furthermore, this practice boosts morale and sharpens customer interaction skills. Remember, while technology enhances our capabilities, nothing beats the impact of genuine, in-person communication in the dealership environment. Additional Exploration: For those looking to improve focus and foster deeper thinking in our distraction-filled world, check out the book “Stolen Attention: Why You Can’t Pay Attention and How to Think Deeply Again.” This book offers insights into reclaiming our ability to concentrate and think critically, an essential skill set for thriving in today’s fast-paced auto industry. What matters to shoppers of different age segments Turning our attention from the dealership team to the showroom floor, let’s explore the broad spectrum of multigenerational customers stepping through our doors. Notably, delving into their unique purchasing habits and what drives their decisions offers valuable guidance for tailoring our sales tactics, marketing messages, and overall customer experience. Key buying factors: • Price and Features: Price emerges as the top consideration for vehicle purchasers, with 22% of respondents prioritizing it over other factors. Reliability follows closely at 18%, with safety considerations at 16%, underscoring cost and dependability as critical in the buying process. • Vehicle Type: Preferences vary significantly with age; 82% of U.S. auto shoppers lean towards gas-powered vehicles, particularly older demographics. However, when it comes to size, 56% are eyeing larger cars like SUVs and trucks. Meanwhile, the likelihood of considering an electric vehicle purchase spikes by over 67% among those open to buying within three months. Although older consumers (55-64 years old) show 30% less

The auto industry is steering through a terrain marked by increasing loan rates and delinquencies, facing the dual challenge of maintaining profitability while uncovering ways to assist consumers in purchasing the vehicles they desire and need. Dealerships dedicated to reducing financial stress for buyers, particularly auto loan delinquency, and enhancing customer service are adopting innovative financial strategies and prioritizing the customer’s needs. Let’s explore how beneficial financial solutions and a strong commitment to service play a vital role in fostering mutual benefit for both customers and dealers. Interest Rates Hit the Brakes on Affordability With inflation impacting every sector, the auto industry is grappling with its own set of challenges. The Federal Reserve’s efforts to control inflation by raising interest rates have escalated the cost of auto loans, adding another layer of pressure for car buyers. Coupled with lingering pandemic-related supply chain disruptions, vehicle prices have soared. Last month, the average new car loan rates jumped to an alarming 9.7%, up 130 basis points year-over-year (YOY), making car ownership a dream out of reach for many. Additionally, Cox reports that the average loan rate for used vehicles escalated by over 30 basis points, surpassing 14%—a notable surge of 120 basis points YOY. This rise in loan rates for both new and used vehicles significantly strains prospective buyers, further complicating the path to car ownership. Auto Loan Delinquency on the Rise The financial squeeze isn’t just a perception; it’s a reality reflected in rising delinquency rates, particularly among younger and low-income borrowers. F&I Showroom reports a concerning trend: nearly 8% of auto loans were delinquent by the end of last year, with serious delinquencies—those 90 days or more overdue—increasing to about 2.7% from the previous year. These statistics are a stark reminder of the real challenges people face in maintaining vehicle ownership, underscoring the need for adequate financial solutions and support. Shifting Gears: Solutions on the Horizon Strategy #1: Easing the Financial Burden Customers find themselves in a challenging position, caught between historically high prices of new vehicles and used vehicles pricing that, despite a slight decline, still hover near all-time highs. Compounding this challenge, lenders are tightening their belts, limiting both the terms and the amounts they’re willing to finance, which adds another layer of difficulty for buyers. In this tough spot, BudgetCare stands out as an affordable coverage option. It provides a cost-effective solution for consumers seeking protection against costly repairs, while also enabling dealers to offer quality coverage at a reasonable price, maintaining profitability. This approach assists customers in navigating financial constraints and enhances dealer offerings in a competitive market. Strategy #2: Smart Financing Options Finance and Insurance (F&I) teams play a pivotal role in the car buying journey, serving as financial navigators who champion the financial well-being of customers. By utilizing their deep knowledge and innovative tools like Smart Payment Solutions, F&I experts are equipped to craft personalized, sustainable payment strategies that enhance vehicle affordability. This method leads to manageable monthly payments, alleviating financial pressure for buyers. In turn, it cultivates a more sustainable ownership experience and improved cash flow for dealerships. Driving Innovation and Affordability in Auto Ownership In these turbulent times, the auto industry continues to forge ahead, embracing innovative solutions that ensure peace of mind behind the wheel. This move towards greater affordability is multifaceted. Coverages like BudgetCare ease the burden of unexpected repairs, whereas dealership teams draw on their expertise to help create personalized payment plans. This dual approach mitigates financial stress for consumers and enhances the value provided by dealerships, making vehicle ownership more accessible and manageable for a wider audience. Your Partner in Profitability With over three decades of experience in the auto industry, our commitment to supporting dealerships with strategic insights and tools remains unwavering. By fostering partnerships and sharing knowledge, we strive to enhance profitability and deliver value to dealers and consumers. For those interested in exploring how these strategies can be implemented to navigate the current economic challenges and auto loan delinquency, our PRO Team is ready to share our expertise and become your partners in profitability. Let’s connect to discuss your specific needs.  

As the final miles of 2023 unfold, dealerships find themselves at a critical juncture, headlights illuminating the road ahead into the promising expanse of 2024. The automotive industry has left imprints that demand attention — patterns that offer valuable insights for dealerships crafting their course forward, like road signs. Unveiling the changes and opportunities, we explore three defining trends shaping the course of automotive progress and influencing dealership success for the approaching journey in 2024. Source: Experian Automotive VIO as of September 30, 2023 (all motorized, road-registered vehicles) | Automotive Market Trends Q3 2023 Surging New Vehicle Registrations and Shifting Preferences In the rearview mirror of 2023, the automotive industry reflects a notable surge in new registration volumes, charting a course toward 14.9 million annualized registrations. Additionally, this upswing, marking a robust 12.7% increase from the prior year, underscores a shift in consumer dynamics and preferences. A clear trend stands out: more people are buying utility vehicles, making up a significant 56.9% of all new vehicle registrations. As we navigate this trajectory, another noteworthy detail is that gasoline vehicles continue to exert influence, showcasing year-over-year volume growth in U.S. light-duty vehicles. Therefore, these changes prompt dealerships to reassess their methods. Furthermore, a need to adjust strategies to better align with the changing preferences of consumers in the automotive industry. Used Vehicle Trends: Navigating Decline and Crafting Profitable Strategies In contrast to the surge in new registrations, the landscape for used vehicles tells a different tale. Registrations for used cars continue to decline, down 2% from the previous year, amounting to 29.3 million. Notably, the decline can be attributed to a confluence of factors, primarily characterized by low volumes and escalating prices. In response, dealerships can explore promising avenues such as Finance and Insurance (F&I) products, offering tangible value to customers while enhancing profitability. Furthermore, diversification emerges as a critical strategy, allowing dealerships to broaden their revenue streams across a more extensive customer base. This shift mitigates reliance on a few high-margin sales, paving the way for a sustainable and profitable future. Source: Experian Automotive VIO as of September 30, 2023 (all motorized, road-registered vehicles) | Automotive Market Trends Q3 2023 Sweet Spot Vehicles: A Growing Market and Service Opportunity The aftermarket “Sweet Spot” flourishes, boasting a volume of 103.2 million with projected growth until 2026. Within this sweet spot, vehicles from model years 2012 to 2018 show a notable 4% increase from 2022 and a significant 22.9% surge from 2019. This scenario highlights an opportune market. These vehicles are advantageous for dealerships due to their position beyond general OEM warranties, primed for additional services.  Moreover, as these vehicles age, the likelihood of requiring part replacements and services increases. As a result, this provides a chance for dealerships to cater to sweet spot vehicle owners through their service departments. This ensures a steady stream of revenue and establishing a meaningful connection with a growing market segment. Staying Road-Ready for Dealership Success in 2024 Preparation for 2024 demands a strategic focus on productivity, sales growth, and enhanced profitability within pivotal profit centers like F&I and Service departments. In addition, staying attuned to dynamic industry trends is crucial. Ensuring personnel are equipped with the latest industry knowledge and skills through continuous training. Cultivating a culture of ongoing learning and training positions the dealership for success as the journey toward 2024 unfolds. Steering Dealerships towards Success in 2024 In the dynamic landscape of 2024, it’s crucial for dealerships to adapt and thrive. We are deeply attuned to the industry’s specific challenges and trends. Leveraging our specialized expertise, we stand as a pivotal strategic partner, uniquely positioned to guide you through these dynamic changes in the automotive world. Connect with us to explore how we can bring decades of experience, crafting a tailored Profitability Improvement Plan. We are prepared to work with you to elevate your dealership’s success in the coming year. Let’s navigate the road to prosperity together. Data and charts credit: Experian

The automotive landscape is shifting due to affordability, increasing interest rates, and supply chain issues. The average age of cars and light vehicles in operation (VIO) in the United States has risen to a new record of 12.2 years. With a shift in the automotive landscape where buyers are holding onto their vehicles longer, dealerships are pivoting their focus to the service department to maintain profitability. But the critical question is how do you turn your dealership into your customers’ top choice, ensuring they stick around and never think of servicing elsewhere? Hence, implementing a well-crafted Dealership Loyalty Program, with its myriad benefits, not only streamlines boosting retention but also invites customers to be part of something special. Here are five reasons why dealership loyalty programs are a game-changer: 1. Elevated Service Engagement and Doubled Spending Loyalty program members visit the dealership’s service department almost twice as frequently, ensuring a consistent and proactive approach to vehicle care. What’s more, they not only visit more often but also contribute to a robust spending culture by doubling their expenditures compared to non-participants, a study found. It’s more than loyalty –a dynamic partnership that elevates service standards and financial gains for customers and the dealership. 2. Setting Your Dealership Apart from the Competition Setting your dealership apart is crucial in a highly competitive automotive landscape. A well-crafted loyalty program becomes your unique selling proposition, providing a tangible and appealing reason for customers to choose your services over competitors. Moreover, it’s not just about the vehicles you offer; it’s about the comprehensive experience you provide. Our loyalty program ensures your dealership stands out as a customer-centric destination, fostering a sense of exclusivity and commitment that competitors can’t match. 3. Crafting an Impressive Online Presence for Your Dealership In an era dominated by digital presence, standing out online is as vital as making an impact in the physical market. A robust loyalty program enhances your dealership’s online reputation, attracting and retaining customers in the virtual realm. Additionally, loyalty programs use targeted strategies like email and print marketing, exclusive online offers, and personalized interactions to position your dealership at the forefront of the market. It’s not just about visibility; it’s about creating a presence that reflects the exceptional value and service awaiting customers in person. 4. Attract and Retain Customers A dynamic loyalty program acts as a powerful magnet, drawing in new customers and creating a gravitational force that keeps them coming back. The allure of exclusive benefits, personalized offers, and a sense of belonging motivates potential customers to choose your dealership over others. Moreover, once they experience adequate service and perks, they become part of an exclusive community, fostering long-term loyalty. It’s not just about attracting foot traffic; it’s about building a customer base that remains loyal to your dealership, generating sustained success. 5. Enhanced Customer Satisfaction & Boost Referrals Elevate customer satisfaction to new heights and watch it transform into a powerful marketing tool. Furthermore, a well-implemented loyalty program ensures that every interaction with your dealership is not just a transaction but a delightful experience. Satisfied customers become your advocates, sharing their positive experiences and exclusive benefits with friends and family. This organic word-of-mouth marketing drives referrals, expanding your customer base without hefty advertising costs. An expertly crafted loyalty can help you increase sales and repeat business. In addition to those benefits, the Global Loyalty Program by our parent company, Portfolio, elevates reinsurance premiums across departments and empowers you to launch a marketing campaign that maximizes associated risks, propelling your dealership success to new heights. Additionally, it improves CSI scores by delivering tangible benefits to your customers and can be tailored for lease vehicles. Connect with us today to explore how this loyalty program can significantly enhance your dealership’s profitability.

In the ever-changing world of automotive sales, the road to success is full of twists and turns. As we navigate further into 2023, the automobile industry is once again witnessing shifts that demand our attention. The industry is in a state of flux, presenting both uncertainties and possibilities. We’ll explore these car industry trends and their implications on dealership profitability. As we navigate these trends and dissect their implications, one thing becomes clear: adaptability and innovation will be the keys to success in this evolving automotive landscape. Buckle up as we explore these trends in detail and uncover strategies to steer your dealership towards profitable horizons in this changing market.   1. Growth in New Vehicle Inventory and Sales: The engine of the automotive industry seems to be revving back to life, fueled by pent-up demand. Throughout August, the total U.S. supply of available unsold new vehicles climbed to a level not seen since April 2021. As per Experian report, the new registration volumes are steadily on the rise, reaching 7.7 million, marking a remarkable 13.2% increase from the previous year. The pent-up desire for new vehicles is palpable, and this resurgence is breathing new life into dealership showrooms. But while this is a promising development, it’s not without its challenges. The increased demand for new cars is just one part of the puzzle, and the declining used vehicle market demands equal attention.   2. Used-Vehicle Supply and Sales Drop: As the new car market gains momentum, the used vehicle market has encountered rough terrain. Cox reported, total supply levels are reminiscent of 2021, but down by 10% from the previous year. Used vehicle registrations continue to decline, with volumes plummeting by 3.6 million compared to 2021, a 2.5% drop from the prior year as per the above Experian trends. The tight inventory to sell and lower sales figures present dealerships with a conundrum. Considering this, it’s imperative for dealerships to explore innovative strategies to bridge the profitability gap. One practical approach is to offer Finance and Insurance (F&I) products that provide tangible value to customers and higher profitability to dealerships. Additionally, diversifying revenue sources across a broader customer base can reduce reliance on a few high-margin sales, ensuring a more sustainable and profitable future.   3. Vehicle Pricing and Affordability Gap: In today’s automotive landscape, the road to vehicle ownership has become a challenging journey for many households. In their report, Cox highlighted that the average payments have surged significantly by 23-39% since 2019, leaving prospective buyers pondering their financial capabilities. The affordability gap has widened, and the dream of owning a new vehicle might seem distant. As we grapple with these pricing challenges, there’s a need for a thoughtful approach to empower consumers. This approach goes beyond the vehicle price tag; it delves into the realm of Finance and Insurance (F&I) products. These products serve as more than just an additional expense; they are a protective shield. By carefully guiding customers through these offerings, F&I teams help buyers understand how these products guard their investments against costly repairs and potential financial setbacks in the future. This perspective shift helps shoppers appreciate the value F&I products offer. They become more inclined to explore these offerings, knowing that they are not just expenses but strategic safeguards for their automotive investments.   4. Potential in Servicing Vehicles Within the Sweet Spot: Amid these changes, Experian data shows there’s a promising sweet spot within the automotive landscape. Over 36.1% of all vehicles fall within the “Sweet Spot” (Model Years 2012 – 2018), marking a 4% increase from 2022 and a staggering 22.8% rise since 2019. This segment represents a substantial portion of the market, with over 103 million vehicles within this range. It signifies an active demand from a significant portion of customers seeking tailored solutions for their cars. By focusing on this specific segment, dealerships can position themselves as solution providers for maintenance, repairs, and additional aftermarket services. Sweet spot vehicles often require higher service and maintenance, presenting dealerships with an opportunity to generate a consistent revenue stream and offset the challenges in profitability. At PRO, we’ve been championing dealership success for over three decades, and car industry trends in this evolving economy is just another chapter in our journey. We’re here to partner with you, offering expertise and support to boost your dealership’s profitability. Reach out to us today, and together, we can steer your dealership towards a profitable and successful future. Trends graphs and charts credit: Experian Analysis and Cox Insights

In a challenging financial landscape, the impact of rising interest rates on F&I (Finance and Insurance) departments of dealerships cannot be overstated. Recent data from the first quarter of 2023 paints a mixed picture for publicly traded dealership groups. As per automotive news report, four of the six major groups experienced a year-over-year decrease in their average F&I gross profit per vehicle retailed. To emphasize, these fluctuations underscore the complex relationship between higher interest rates, vehicle affordability, and F&I sales. In the past year, there has been a noticeable increase in interest rates, affecting various sectors of the economy. For our dealership customers, this surge has translated into unexpected increases in their monthly payments. Meanwhile, behind the scenes, our F&I department has found itself navigating a complex and challenging terrain. Amidst the backdrop of soaring interest rates and lingering economic uncertainties, car buyers find themselves at a crossroads, carefully weighing the pros and cons of their purchasing decisions. Some are considering full cash payments for cars to avoid finance charges. Simultaneously, doubts surface regarding the necessity and value of purchasing Vehicle Protection Products, leading some to question their worth. As we navigate these complex dynamics towards the close of the year, F&I professionals are presented with a unique set of challenges and opportunities that demand strategic adaptability and a forward-thinking approach. This involves preparing and training your F&I teams to meet the demands of changing market conditions and collaborating with F&I agent partners to address the evolving landscape of vehicle protection needs effectively. Effective F&I Conversations Given the high costs associated with vehicles and their maintenance, it’s crucial to approach this conversation thoughtfully. This empowers F&I teams to efficiently guide customers in identifying their specific needs within the F&I realm while highlighting the substantial value these products offer. Furthermore, F&I products serve as a protective shield, guarding their investments against costly repairs and potential financial setbacks in the future. This approach enables shoppers to grasp the significance of F&I products better, making them more inclined to explore these offerings for purchase. Going Beyond Margin Expansion In the face of the challenges posed by soaring prices and sluggish sales, the path to enhanced profitability does not solely lie in margin expansion, which could limit your earnings to a small portion of customers. Instead, consider the principle of earning 1% from 100 customers rather than relying on 100% from just one. This means, diversifying your revenue sources across a more extensive customer base and reducing your reliance on a few high-margin sales. Therefore, by offering added value and introducing new products, you can tap into a broader customer pool, diversify revenue streams, and foster a more sustainable business for higher profitability. Training as a Cornerstone Comprehensive training is crucial for helping your team develop the skills to understand customer needs beyond basic communication techniques. Training fosters a consultative approach, empowering your team to effectively convey the value of F&I products and to identify and address each customer’s unique needs and challenges by asking the right questions. This approach ensures customers fully comprehend the benefits and advantages of these products. Additionally, by instilling this awareness and knowledge, your team can expertly guide customers in making informed decisions to safeguard their valuable investments against increasing repairs. Furthermore, training that creates realistic role-play scenarios within a safe environment offers your team valuable skill enhancement opportunities and bolsters their confidence, enabling them to become more effective sellers. Industry Collaboration to Mitigate Impact of Rising Interest Rates on F&I In the ever-evolving automotive industry landscape, F&I stands as a critical tool for sustaining dealer profitability. The year 2023 presents a complex and shifting scenario marked by competitive trends. The potential for an economic slowdown and rising interest rates underscores the necessity of F&I playing a more prominent role once again. Yet, this indispensable profit center faces another formidable adversary — inflation and high monthly payments. In these times of economic turbulence, where profitability hinges on every decision, it becomes paramount to distinguish between mere vendors and genuine partners. You want a partner who cares about your business and wants to help grow it as much as you do. This is where a consultant partner comes into play. Having traversed every department within dealerships and weathered numerous industry cycles, they understand how to navigate these turbulent waters. Their insights, honed over years of experience, serve as a reliable compass to steer through challenges and harness the opportunities that lie ahead. At PRO, we embody this commitment to dealership success. Our tailored F&I programs are designed with your profitability in mind. Contact us today to discover how our partnership can help reduce the impact of rising interest rates on F&I and significantly enhance your bottom line.