With the effects of COVID-19 challenging the nation, auto dealers need to focus on the top F&I trends sweeping the industry in 2020. These trends can guide your business strategy until this pandemic is over.
Car dealerships are facing unique challenges this year. Your customers are avoiding physical contact with other people, which includes your sales team, and unemployment is hampering auto lending growth.
Top 4 F&I Trends Your Dealership Needs to Watch in 2020
COVID-19 forced a lot of businesses – car dealerships included – to change the way they operate. As information about the virus continually changes, these are the trends to follow for 2020 and beyond.
1. Shift Toward Virtual Shopping
Whether your customers are under citywide stay-at-home orders or they are voluntarily isolating themselves, they’re still shopping for cars. Now, though, they’re doing it online.
Approximately 66% of car buyers are more likely to purchase a vehicle online during the pandemic, and 62% of them are more likely to complete part of the process online.
2. Increased Used Car Sales
COVID-19 is impacting new and used car sales differently. New car sales for one major dealership were down 28%. Used car sales, on the other hand, were up 6%. On top of that, wholesale used car prices increased by 5.74%.
As economic uncertainty looms because of the coronavirus, auto dealers can take advantage of market f&i trends by offering deals on used cars and trucks.
3. Enhanced Technology and AI
Shoppers are also shifting to enhanced technology in the vehicles they choose. Millennials have increasing technology demands with 65% of them willing to pay more for an alternative powertrain and 16% comfortable with self-driving cars.
Millennials account for 40% of new car sales and keeping up with their needs can give new car dealers a path to sustainable growth.
4. Tightened Lending Decisions
The economic challenges facing the nation mean that lenders in many industries will tighten their lending criteria. There is a lot of uncertainty in the job market, especially for people who aren’t considered essential employees.
LendingClub indicates that they will be tightening their credit measures as a result of job losses and because their second-quarter loan originations were down about 90% compared to the fourth quarter in 2019.
How Automotive F&I Professionals Can Boost Business
Some of these F&I trends might sound like bad news for car dealers and customers, but there are steps you can take to boost your profits during this unprecedented time. The most important is to work with automotive F&I professionals.
These professionals have the experience, resources, and skills you need to develop a long-term strategy for growth as you adjust to the world’s new normal.
Ready to drive your dealership’s profits? The ACE Group has the services you need to maximize your revenue potential.