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Dealership Insights Forum August Recap: F&I Products
Dealers convened again this month for the Dealership Insights Forum. Following last month’s discussion about improving service back-end processes, this month dealers discussed F&I products – what is the hot product right now?
Here are some key insights from this month’s discussion.
Key Takeaways
The Finance penetration average has spiked significantly to 62%, suggesting a lot of popularity in financing when rates were previously lower. This is also indicative of the significantly greater expenditure needed to own an RV/Trailer in recent years.
Product penetration spiked in 2022 and has declined a bit in 2024 as the Covid-era popularity of safe travel options began to wane and sales returned to a more normalized level.
The F&I Profitability Index was high in 2022 and has levelled off a bit since the pandemic, mainly due to inflationary challenges faced by dealers in procuring parts for insurance claims.
What does this mean for dealers?
For dealers these industry benchmarks mean that now is an excellent time to leverage the popularity of financing as it remains a strong boost to profitability and putting proper resources into the promotion of flexible financing options is crucial.
Additionally, dealers should be expecting a more stabilized market as the strong economic effects of covid are primarily behind us, which will lead to more predictable market outcomes.
Finally, the rising costs of strong inflationary effects seen across the United States and Canada in the past couple of years have added additional layers of complexity to margin-management and drive the need for dealers to focus on cost-management and supply-chain optimization where possible to ensure profitability of insurance programs.
How quickly is the F&I manager getting involved in the financing process?
“We get out finance people in front of the customers once a deal is coming to fruition it gives us the opportunity to have discussions with the customer and build a rapport.”
“I try to get out early in front of the customer to ensure their meeting me for the first time when discussing finance, it can be very helpful to get out there early”
Outside of financing options, what other products are you selling?
“I know in Canada a lot of the dealers have mouse protection and prevention on units to keep them out.”
“We sell life and disability insurance.”
“We do have a product called RV guard that does the cosmetics for awnings.”
Has anyone seen a higher rate of gap cancellations lately?
“We are seeing a higher rate of cancellations in that area.”
“Yeah, I’ve seen it from insurance companies that would like to have a gap product as well.”
“Haven’t heard that lately, the good news is the Fed just announced a rates reduction.”
About the Dealership Insights Forum
The Dealership Insights Forum is a monthly meeting with fellow dealers to discuss market trends, share best practices, and gain insight into how other dealers are running their day-to-day operations.