Finance and Insurance (F&I) departments are an important part of any used-car dealership, as they often form the link between customer aspirations and ultimate satisfaction.
After all, the consumer may fall in love with a particular vehicle, but as they are not a cash buyer, they need to explore their finance options before taking possession of the keys. At this moment, an F&I department could offer a variety of additional products and services, and these could prove pivotal in helping to keep the customer engaged. These “add-on” solutions could make perfect sense for the buyer and, crucially, keep them returning to the dealership. Here’s how:
It’s tempting to segregate individual departments within a busy used-car dealership to make management and accounting easier. However, this can create a “siloed” approach where each department tends to function independently to take care of its own performance targets.
This can be a short-sighted approach. It would be far better to integrate operations to an extent, so the people in each department can become more invested in the company’s overall success. With the correct focus on integration, the customer will be more satisfied and may feel that they are getting a better, all-around experience.
Further, the people who work in your F&I department can contribute to the dealership’s overall revenue. They can sell various products and services, some of which can be bundled into loan products, but can often make the customer more likely to keep in touch with the dealership and generate repeat business.
Without some of these add-on products, a customer could simply drive away into the distance and not return. Your dealerships need to find proactive ways to keep their interest and turn them into loyal customers who are likely to buy more vehicles in the future. After all, in marketing terms, it’s far easier to sell to a happy, existing customer than to find new ones. With this in mind, it makes sense to connect the service department to F&I to tie the customer into a longer-term service contract.
If a particular car does not come with a service contract in place, it’s a good idea to sell one. Apart from representing an obvious, additional revenue stream, it’s a perfect opportunity to hang on to the customer. Further, if the F&I department coordinates communication with the funder, they can send key servicing messages to the customer alongside a monthly loan statement.
This type of approach is better than any stand-alone direct-mail or email campaign, as the customer is far more likely to open their funding statement. They know that it contains some valuable information about their loan, rather than something they may consider junk mail. Alongside the financial detail, the mail could include a reminder to visit the service department for an oil change. It could also include some tips to help with general care or maintenance to keep the service department in the front of the mind.
Don’t forget that finance agreements last longer than the typical service warranty. So, strategic messaging can prompt customers to renew or extend the warranty contract at the right time.
If your service department offers a rental car as a “loaner” during a service visit, use these monthly finance communications to remind your customers about this level of treatment. At the same time, you can point out other benefits such as free Wi-Fi, coffee, or snacks while the customer waits for the technician to do their work.
Ways to Tie Service to F&I
Consider practical ways to tie your service department to F&I:
- When service sends out appointment reminders, include a tailored finance offer
- Prompt the client to buy an extended service contract when an initial service warranty is almost over
- Offer a new car as an option if a service estimate is very expensive
- Share CRMs between units to make sure that the customer is touched by F&I whenever they come in for service
While you consider how to make F&I work with your service department, remember that you should also focus on repeat buyers. Send your customers some unique offers before their current loan is likely to end.
Pair these offers with an invitation to come in for a test drive but give them plenty of valuable, usable information at the same time. This will help to cement your reputation as the go-to source when it comes to buying a car.
Getting Help from NIADA
Remember, you don’t need to go it alone as you look for ways to integrate your F&I and service departments. Join tens of thousands of independent dealers who have signed up to work with NIADA. We’ve been supporting the independent used car dealership community for more than 75 years, so reach out today for more information.