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Old 01-13-2008, 11:30 PM   #1
XDCX
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Default Greatest Profit Opportunity in the F&I Department?

As new-car gross profits continue to slide, dealers are being forced to rely on their F&I Department for additional profits.

The purpose of this post is to survey Finance Managers in an effort to determine what they believe are their greatest profit opportunities for 2008?

The question will be posed to each franchise group in an effort to determine if the answers differ based on the franchise. As an example, is it easier to sell a Service Contract on a domestic vehicle than an import? Is it easier to hold rate on a lower priced car line than a high-end car line?

So, here's the question for the Finance Managers: What's your greatest opportunity to increase profits for 2008?:
  • Interest Rate Reserve
  • Vehicle Lease Reserve
  • Service Contracts Sales
  • Maintenance Plans
  • GAP Coverage
  • Life, Accident and Health Plans
  • Vehicle Accessory Sales
  • Chemicals/Appearance Products
  • Other
Please take a moment and share your thoughts - maybe you have an idea that could help someone else?
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Old 02-29-2008, 03:39 PM   #2
bruce350
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Greatest opportunity will come from not financing through Ford Motor Credit. They think they are doing you a favor by offering buy rates 2-3 points higher than their competitors.
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Old 01-28-2009, 03:42 PM   #3
Bozone101
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Quote:
Originally Posted by bruce350 View Post
Greatest opportunity will come from not financing through Ford Motor Credit. They think they are doing you a favor by offering buy rates 2-3 points higher than their competitors.

Yea, Whats up w/ that.. I still think that the VSC is where the $$ is at. Not to mention the value to the customer.
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Old 01-28-2009, 04:02 PM   #4
CL Pgh
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Couldn't recall this thread... then noticed the prior post was almost a year ago... isn't it a shame were still in this mess, a year later!
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Old 01-28-2009, 10:59 PM   #5
XDCX
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Quote:
Originally Posted by CL Pgh View Post
Couldn't recall this thread... then noticed the prior post was almost a year ago... isn't it a shame were still in this mess, a year later!
Yeah, this section has been a little slow....

Now that we're getting more traffic my goal is to find a Moderator for each Manufacturer who can help keep their section updated with relevant issues.

Back to your point, it's sad that after a full year many of the same issues remain unresolved.
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Old 01-29-2009, 08:17 PM   #6
Snowrider
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In my F/L/M store, the best profit from a dollars standpoint comes from the VSC sales. From a volume standpoint, the chemical protection package comes in 1st with about 70% penetration. That's due in part from the sales staff getting spiffed on it plus we're in an area in the northern midwest where we salt the roads more than McDonalds salts fries. Most finance contracts roll with Gap unless there's a substantial chunk down. CLAH is a minor factor but still sells since the rates aren't too prohibitive.

The Ford pre-paid maintenance programs are top-notch, best I've seen in my group, so there's a strong penetration with that product.

Overall the store averages $1100+ per copy in finance and most of it is in product sales. I have super-strong relations with the local (bad word here) Credit Unions and they buy deep. Yield spread accounts for very little since we get only about 1% to 1.5%of the amount financed based on the credit union. We're floored with FMC, but their standard rates aren't worth mentioning; we usually do better elsewhere.
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Old 01-29-2009, 11:15 PM   #7
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Snowrider - great post, I'm really happy you joined the forum.

One of the things I like about a national forum is exposing "regional differences" - your high penetration of chemical packages is a great example.

The one that struck me, however, was CLAH. I'm a West Coast guy and I had to stop for a second and think what that was. We used to refer to it as "LA HA" but I can't think of a dealer that I know that's sold it in the past five years.

The other thing I thought was interesting was your comment about credit unions. Although this forum is still pretty new I get the impression that most members here have a favorable view of credit unions. (Perhaps that's because the majority of the members here are from the sales side?)

Thanks again for a great post.
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