IDS: What to Know About Dealership F&I for Profitability
EDITOR’S NOTE: The following is an edited excerpt of a report by IDS. Read the full report here.
As customers approach the final stages of their RV purchase, they are directed toward the F&I office to finalize financing and insurance paperwork. In a changing marketplace where unit sales are on the decline, it’s increasingly important to optimize per-unit gross profits.
In this blog post, using the expertise of Josie Prosdocimo, director of product management at IDS, we delve into some best practices for maximizing dealership F&I gross profit and explore tips for keeping unit costs down through efficient floorplan management.
How to Improve Your Dealership’s F&I Gross Profit:
There are several ways to improve your F&I gross profit in RV sales, including:
Offer a Comprehensive Range of F&I Products
By providing customers with a wide range of F&I products, such as extended warranties, gap insurance, roadside assistance, and tire and wheel protection, you can increase the likelihood of boosting your gross profit.
A well-rounded product offering allows customers to tailor their purchase to their specific needs and provides an opportunity for higher-profit margin add-ons.
However, simply having products available isn’t enough on its own. It’s important to educate customers about the value of F&I products they are purchasing and how they can protect their investments. Ensure your sales and F&I team is well-informed, knowledgeable, and equipped to effectively communicate the benefits of F&I products to customers.
By highlighting how these products optimize and protect their investment, provide peace of mind, and offer financial security, you can help customers see the tangible and intangible value and make informed decisions and purchase the right products for them.
Pricing strategies also play a crucial role in optimizing F&I gross profit. Although it’s important to price competitively, pricing too low may undermine the value of the product. Striking the right balance is key.