While many Americans may dread preparing their tax returns, everyone loves when their tax refund hits their bank account. You know who loves “tax refund season” even more? Anyone who sells big ticket items for a living, i.e. car dealers. Many dealerships are already anticipating a boost in retail vehicle sales in connection with their customers receiving an income tax refund. Also, with the weather warming up, early spring is ideal for drivers to get their cars prepared for road trips, more frequent driving or even that epic summer vacation that’s only a few months away.
As tax return season approaches to drive more customers to your dealership, now is the time to be sure to maximize your F&I opportunities.
There will be consumers who will opt to make a substantial down payment on a new vehicle, and enjoy lower payments or shorter terms, saving them money in the long run. But dealers will also have customers who will want to use their tax refund to take care of the vehicles they already own. Regular maintenance and repairs cost money, and protection beyond OEM coverages is always advisable.
With tax refunds coming, perhaps spring is the best time to add pre-paid maintenance to your vehicle service contract (VSC) menu. Or, maybe it’s an ideal time to offer a tire and wheel policy to drivers planning a road trip. If a customer bought a new vehicle a couple tax returns ago, they may be nearing the end of their OEM limited warranty, providing another perfect opportunity to help them protect their purchase.
Does your current F&I provider offer month-to-month subscription-payment-based contracts for your customers? Is your current menu transparent about the range of coverage levels and deductible options, like deductibles ranging from $0 to $250, or coverage levels ranging from powertrain to comprehensive?
If you are not reaching out to your customers following the vehicle sale, you are missing out on a huge opportunity to generate additional revenue. Some studies report the post-vehicle purchase VSC sales channel as a $2.4 billion opportunity. Do your current F&I offerings even reach those customers?
Leveraging data to serve personalized products and offers can be a winning strategy, but customers are wary of responding to those messages unless they are satisfied with other elements of the digital experience. Now is the time to prioritize delivering on customer expectations for security and convenience. With recent transitions announced among some F&I menu platforms, all the more reason to take some time to thoroughly evaluate your options.
Dealers want a true partner for their VSCs, one that provides seamless support to their customers, and they want to be able to offer customizable products. Consumers want to control their vehicle protection decisions and save money. It’s time to take a close look at your partners, evaluate your offerings and prepare to optimize your F&I — before tax refunds are spent elsewhere.
