Is F&I Benefitting from Work-from-Home Car Buyers? Seems Like It…
Work from home is a thing now. For the last few years since the start of the pandemic, companies have been more open to the idea of working from home as a way to reduce turnover while maintaining productivity.
Though some major companies are starting to bring back workers to a ‘hybrid’ work environment, ‘fully remote’ workers are likely here to stay.
For dealerships, there has been an interesting and unexpected benefit from the work-from-home that many have not seen coming. Car buyers who are no longer commuting to an office seem to be spending more both on the price of a vehicle and willing to spend more on F&I products to protect them.
How can F&I capitalize on this trend and why does working from home translate into bigger opportunities for PVR growth? Let’s unpack it…
- More Disposable Cash - if you’re not spending a hundred dollars or more on gas and routine maintenance due to commuting 5 days a week, that’s extra money that can be allocated to a higher car payment. With higher interest rates, it becomes even more important to have that extra $40-60+ per month to buy the car you want.
A survey by GDK reveals that 47% of customers with a flexible work schedule were looking to buy a new car in the upcoming year. These are perfect opportunities to increase PVR relatively easily when payment buyers have more to spend.
- Looking at Hybrids/EV’s - Another interesting finding was that buyers that were either fully remote or working a flexible schedule were more likely to buy a hybrid or EV than a regular gas model. Easy to see why…if they don;t have to drive much each week, the issue of ‘range anxiety’ is no longer as big of a concern since there is no long daily commute.
This gives F&I staff more opportunities to sell (and upsell) enhanced EV protection and products in the channel. Be sure your provider has added robust add-ons for EV’s and hybrids.
- Upgrading to Luxury Vehicles - Since fully remote workers average at least $75k in annual income, more buyers in this segment are taking the plunge on luxury vehicles or choosing an expensive trim package. More money each month, more likely to splurge.
F&I managers can benefit here from higher prices for higher trim & options packages as the buyer will understand that with all the added tech comes the high price to repair it.
Higher finance reserves come with luxury vehicles even with the current state of higher base rates. PVR has already been bolstered by this last year but with more buyers working from home or having a hybrid schedule, those reserves should continue to increase.
- A New Generation of Buyer - More Millennials and Gen Z are working from home or working within a hybrid schedule. For many that work remote, they see F&I products as more about peace of mind than an extravagance. Dealers are seeing that many buyers simply don’t want to have the hassle of a car breaking down and having to take time to figure out how it will get fixed. This seems to be leading to an increase in PPM and VSCs…buyers now want to know if there is a problem, it will get fixed with the least amount of interaction.
Younger generations of car buyers are more likely to buy F&I products as long as they are fully informed of the benefits before coming to the dealership. Stores that have leveraged online education for F&I products come out the winner here as it makes for a much easier sale when the customer actually comes to the lot. They want a fast process to buy it and they want a no hassle process to fix it.
No one can make any real predictions about the future of working from home but it’s safe to say that for a decent amount of the working population, it may be. F&I managers can identify opportunities to increase PVR and penetration by simply getting to know their customers and asking if they are ‘lucky enough to work from home?’ It’s not an intrusive question, really…not anymore at least.
For more information on how truWarranty can help your dealership better sell to this new segment of car buyers, reach out here for a free demo. We’ve seen trends come and go for years but being ready for tomorrow’s buyer today is how we best help our dealer partners.
Economic uncertainty is not the time to stick your head in the sand…it’s a time to be prepared to do things better so that you can stave off any potential crises if they do pop up.
As we are in the ‘end times’ for COVID (quick…knock on wood), it’s important for F&I departments to take a look at strategies and mindsets that can help with sustained growth over the next 5-10 years.