Dealership Profitability
Keeping an eye on expenses is critical to maintaining profitability in the future. The retail automotive industry is resilient and extremely resourceful when it comes to navigating economic barriers and trends. Walking the path to profitability can be an easier road by implementing simple strategies to maximize profit. Three simple steps to consider:
- A heavier emphasis should be put on the service drive and customer retention. Training your service department to better recognize opportunities for maintenance. This is also an opportunity to enhance dealership communication.
- Evaluate your product menu and F&I pay plans based on products that encourage customers to return to service. Possibly consider selling less expensive consumer protection products. According to NADA 83% of customers who return to the selling dealership for service will purchase their next vehicle from it.
- Provide transparency around the F&I process including information online about the consumer protection products you offer. The goal is to streamline the F&I process. This generates more knowledge in the consumer prior to walking into the dealership.
Increasing back-end profitability is an out of the box trend we are seeing more and more in the variety of dealerships that make up the United States market. Sales are necessary, but also keep an eye on your expenses. As minimum wage, taxes, & tariffs expenses are also only expected to climb.
