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JAMIE LaREAU
More stores hear customers, tailor F&I
| |  | Jamie LaReau covers auto dealers for Automotive News | |
Finance and insurance managers are learning to dump the product hard-sell and listen to customers' needs.
That might sound obvious.
But dealership consultant Michele Peterson says that at some stores, respecting customers' wishes hasn't always been a priority.
Once when Peterson was buying a car, she recalls telling a dealership finance manager she was not interested in any F&I products. Yet he wouldn't stop talking, Peterson says.
"It was two hours and they wouldn't let me out. They kept saying, 'What about this and what about that?' I specifically told them I work in the business. I know the game and I do not want anything. And, yet, they still did not listen."
Her solution was simple: "I would not go back there again."
But she says that hard-sell approach is slowly changing.
Peterson is the global director of digital sales consulting for Dealer Services Group in Detroit. The group, an affiliate of Urban Science, is a consulting, training and data center for dealers.
Dealer Services Group's data on how many dealerships are actually tweaking their practices to better meet and respect customers' needs is too new to provide hard numbers.
But anecdotally, Peterson says the days of bombarding a customer with all the various F&I products regardless of the customer's interests or needs, is changing. More dealerships appear to be listening to a customer's needs and then offering a package of just two to three F&I products that a customer might find value in.
Salespeople start the process. "It's very important that prior to a customer getting to an F&I department, there is someone listening to a customer's needs," Peterson says. "That's starting to happen more."
The goal is to keep customers from saying no. But if they do, accept it.
"You need to respect that and move on," Peterson says. "You can possibly loop back to it later, more subtly, but not at that moment. This is a referral business. You might get a few more customers if you respect their wishes."
JIM HENRY
Banks’ lending lead starts down the street
| |  | Jim Henry is a special correspondent for Automotive News | |
Captive finance companies seem to dominate auto lending because individual captives are so big. There are some giant banks in auto lending too, such as Chase Auto Finance in new vehicles and Wells Fargo Dealer Services in used.
But smaller banks are more numerous, and those small numbers add up. In the first quarter, banks had a 40 percent share of loans and leases vs. about 17 percent each for captives and credit unions, according to Experian Automotive.
Ally Financial, the No. 1 U.S. auto lender overall, also is a bank, even though it resembles a captive in some ways because it’s the preferred lender for General Motors, Chrysler and others. But even if you took Ally’s 6 percent share of the market and put it in the “captive” column, banks still dominate by a wide margin.
Regional lenders such as Huntington Bank in Columbus, Ohio, have some advantages, according to Rich Porrello, director of Huntington Auto Finance. Porrello said in a recent interview that customers in the bank’s Midwest footprint live close to branch offices, and many have other accounts with the bank besides an auto loan.
The same argument could apply to dealers. Dealers at auto finance conferences often complain about banks jumping in and out of auto lending. But dealers also emphasize the importance of personal relationships. Dealers may not always admit it, but that often means the banker right down the street.
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