Finance-and-insurance product opportunities after a vehicle sale are growing amid the coronavirus pandemic, according to a dealership consultant and marketing company that helps with these sales after the fact. Though this market has been growing for years, dealerships should consider these opportunities now more than ever.
Some dealerships are working to improve penetration after the sale. David Diem, executive vice president at Automotive Product Consultants, said dealerships doubled down on current customers amid sales slowdowns prompted by the outbreak. As the U.S. deals with a recession with the highest levels of unemployment since the Great Depression, there’s early evidence that customers will be holding onto their vehicles longer during the pandemic.
“There’s a growing need for those consumers to have mechanical repair protection past that basic factory warranty,” he said. “Demand goes, now it comes back — dealers are looking for every tool to grow revenue, retain customer loyalty and traffic.”
Sales of what Automotive Product Consultants calls “second-chance” service contracts rose 64 percent in March, the highest year-over-year uptick since the program launched in 2006. Year-over-year increases continued in April (39 percent) and May (31 percent).
Automotive Product Consultants offers its data-based marketing program and call center free to dealerships, and is compensated through splitting the F&I profits made post-sale.
Leveraging data on existing customers can help dealerships address revenue gaps brought on by the virus. Though sales may be rising and states opening up after shelter-in-place orders, the pandemic is far from over. As cases rise, and customers hang on to their keys, dealerships should look for other avenues to improve customer satisfaction and build revenue outside of vehicle sales.