| | | WEEKLY REPORT | November 14, 2012 |
| | | | | | | Pitching F&I after customers leave store
At what point should F&I managers stop pitching F&I products and take a customer's “no” for an answer? A panel of five F&I managers at a conference in September said it takes at least three or four “nos” to convince them that a customer really can't be persuaded. Persisting beyond that point is counterproductive, the managers said. ...  story
| Q&A
N.J. store predicts upsurge in GAP after Sandy
 Hurricane Sandy and a snowstorm a week later eventually will generate business for the F&I department and other profit centers at Freehold Buick-GMC in central New Jersey. But for now, Chris Bell, finance director for the store, says the emphasis is on cleanup. ... story
| Relaxed lending, wider credit can propel U.S. car sales only so far, economists warn
 A rebound in U.S. auto sales has been buoyed by the return of easy lending, even to borrowers with flawed credit histories. But some economists question whether the gains can be sustained without a boost in hiring. ... story
| New World Omni chief has banks, airline, AutoNation on resume
 World Omni Financial Corp., parent of Southeast Toyota Finance and other auto financial services companies, last week named Dan Chait president.
... story
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F&I BY THE NUMBERS
Nissan Motor Acceptance ups loan share
Captive Nissan Motor Acceptance Corp. increased its share of loans among its U.S. dealers in the first half of the fiscal year ending Sept. 30. Results are for new Nissan and Infiniti vehicles. | | | | | | | 1st half FY12 | 1st half FY11 | | Lease penetration | 26% | 26% | | Loan penetration | 41% | 33% | | Total | 67% | 59% | | | | | | | Source: Nissan Motor Co. |
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JIM HENRY
Time to brace for the luxury rush
| |  | Jim Henry is a special correspondent for Automotive News | |
For the past 10 years or so, December has become the biggest sales month of the year for luxury brands. But it seems as if those brands' year-end sales pushes start earlier every year.
BMW of North America already is promoting its Happier New Year Event, which runs through Jan. 2. And Mercedes-Benz USA is promoting its Winter Event, which runs through Nov. 30, unless the company opts to extend it. Both companies are offering discount loans as well as leases.
Year-end clearance sales are a self-fulfilling prophecy for luxury brands. That's especially true for sales based on discount lease deals, which the luxury brands perceive as less damaging to resale values and brand image than deals with cash incentives. Leases that start in December are likely to end in December three or four years later -- just in time for the latest round of discount leases. Repeat.
In the F&I office, more leasing means a different mix of F&I products. Lease customers are not likely to buy GAP, since it comes with most leases. They're not prone to buy extended-service contracts either, since most leases end long before the new-car warranty expires.
So F&I managers pitch luxury-brand lease customers the products many mass-market dealerships place in the "other" category: tire-and wheel plans, wear-and-tear protection and key replacement.
BMW and Mercedes dealers are used to a high lease mix. So their F&I managers probably don't need to brush up on their skills for selling F&I products to lease customers. What they will need to do is to eat sensibly and get plenty of sleep. The year-end rush is on.
F&I PRESS RELEASES
» BMW Group Financial Services Regional Service Center Chosen as One of the Top Five Places to Work in Central Ohio
» BMW Group Financial Services expanded BMW Credit Card program offers enhanced benefits
» Ally Wallet Wise Honored with Community Service Award by Financial Literacy Group
DEALER JOB LISTINGS
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F&I BY THE NUMBERS
Extended-service contracts
stable for Group 1, Lithia
Publicly traded new-vehicle groups don't all share details of their F&I revenues, and those that do don't disclose results from the same services. A look at sales penetration rates for select F&I services among new-vehicle buyers or lessees. | | | | | | | Group 1 | Q3 2012 | Q2 2012 | Q1 2012 | | Extended-service contracts | 38% | 37% | 39% | | GAP | 22% | 22% | 22% | | Pre-paid maintenance | 8% | 8% | 8% | | | | | | | Lithia | Q3 2012 | Q2 2012 | Q1 2012 | | Extended-service contracts | 41% | 40% | 41% | | Lifetime oil & filter | 35% | 36% | 37% | | | | | | | | Source: Company reports |
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