July is vacation time for many people. The heat is beginning to set in and the summer doldrums are just around the corner. What better time to take an assessment of your goals and results from the first half of the year – and reset for a busy second half? Did you meet your goals – or exceed them? If you didn’t meet your goals, you still have time to make adjustments.
This annual review always prompts me to consult some industry metrics to get a broader view. In my opinion, Experian Automotive provides a good analysis across the entire automotive finance market. Let’s look at a few industry markers and see how you’re doing.
Leasing activity has steadily increased during the first half of the year. Experian data showed a 3-4% gain each year since 2011, and several lending institutions have posted positive gains in their 1Q financial reports. Have you seen an increase in lease volume this year?
If not, is your sales team trained to address the lease vs. buy questions? We provided some guidance earlier this year on how to assess your customer’s needs and when to offer a lease option. We do not see the leasing trend slowing down for the remainder of the year. Capture your lease opportunities with well-trained staff – and good lending partners.
2016 has seen growth in the automotive finance market with new lenders entering the market. Not only has the number of lenders increased, but the length of loan term has increased as well. Experian data released in the first quarter of this year indicated that 72-75 months was the “new normal” for the length of a loan – and the amount of the average loan has increased as well.
Having good lending partners – and the right portfolio of F&I products – ensures that your F&I department will be able to close even the most difficult deals. Smart lenders are more likely to “gamble” on a loan with an F&I package attached because it is less likely to go into default. Do you have a good relationship with your current lenders – and do you actively educate them on your F&I portfolio? Do you meet with them regularly to discuss your client base and their needs? Have you met your lending goals so far this year?
If your lending partners are not meeting your needs, there is still time to develop new relationships with lenders interested in entering the market. Start off on the right foot by clearly communicating your – and your customer’s needs. And while you’re fine-tuning your presentation, make sure you include details on compliance.
The Federal Department of Labor recently announced that the unemployment rate has reached pre-recession levels. A tighter labor market means good talent will be harder to find – or to keep. Has your F&I team met its goals so far this year? Do you have some hidden talent that could use a new challenge? Have you invested in training your team to keep them at the top of their game?
At Empire Dealer Services, we welcome the opportunity to help our clients evaluate their state of affairs. From training and compliance to building solid relationships, we have tools and resources to make sure your second half is as great as your first half. Enjoy your summer.