How F&I Participation Can Help Dealerships Survive the Next Wave of Economic Impacts

Every major industry publication, along with general news outlets nationwide, is forecasting continued inventory and component shortages across the auto industry. As we head into Q3 and the second year of this unprecedented international health crisis, diminished demand that impacted dealerships in the second half of 2020 has now been replaced by robust consumer interest. The concern that supply will not be there to meet renewed demand is very real.

According to the Cox Automotive March Forecast, inventory levels are tight, having fallen by 20,000 vehicles since mid-March and reached the lowest point since mid-January 2021. Stockpiles industry-wide are notably down, nearly 21% lower than a year ago. “The production disruptions happening now,” the report notes, “will turn into even lower inventory in the months ahead.”

Dealers may be wringing their hands at such statistics and justifiably lamenting, “Now what?!” Your business survived through the pandemic, but will post-pandemic shortages present an insurmountable challenge?

The answer to continued resilience lies in F&I — not just in selling products, but in taking steps to command greater control of the capital generated by them. Now is the time to take a fresh look at participation and ownership options that can make the ultimate difference in whether a dealership successfully navigates the next round of economic disruption.

Dealers who flexed their resilience over the past year, pivoting as needed to online retailing and finding creative ways to keep their customers engaged, have virtually no option but to continue doing so. The fact is there is little you can do to avoid the looming inventory challenges. What you can, and must, do is explore the options available that give you:
• The freedom to make your own decisions regarding the F&I products you participate in.
• The ability to choose how you invest your money.
• The flexibility to decide how to handle claims.

Look for a company that will guide you through those options and help you discover what will work best to immediately put you on the path to increasing your revenue, even in the midst of ongoing pandemic impacts like inventory shortfalls and downward pressure on new-vehicle sales. This company should help you establish the correct structure, ensure compliance and consider all insurance options in order to advocate for your access to capital.

We have learned the lesson over and over that the “100-year flood” is now a nearly constant threat. Are you equipped to survive another major challenge? You can be. Let us demonstrate how simple and lucrative it is to choose a new path that will allow you to control and use your cash, investments and F&I products to your advantage.