Adapting to Change: Best Practices for Automotive Finance Managers in a Shifting Landscape

In the ever-evolving automotive industry, finance managers play a critical role in dealership profitability. As market conditions shift, so do customer expectations, lending standards, and regulatory requirements. To stay competitive, automotive finance managers must be proactive, adaptable, and well-informed. This article explores best practices for finance managers who sell service contracts, helping them thrive in the changing automotive finance landscape.

1. Stay Informed About Market Trends

The automotive finance sector is influenced by factors like interest rate fluctuations, economic conditions, and technological advancements. Staying updated on trends such as electric vehicles (EVs), online vehicle sales, and evolving consumer preferences can help finance managers tailor their approach to meet market demands. Subscribing to industry publications, attending webinars, and leveraging insights from partners like Dealers Resource Center (DRC) can provide a competitive edge.

2. Leverage Training and Resources

Continuous learning is key for success. Partnering with organizations like DRC, which has been providing education to dealers since 1996, equips finance managers with the knowledge to effectively sell products like vehicle service contracts (VSCs). These training programs cover objection handling, product positioning, and regulatory compliance, ensuring that managers are prepared for customer interactions and policy changes.

3. Focus on Customer-Centric Sales

The modern buyer is more informed than ever, often researching products and services before stepping into the dealership. To address this, finance managers should adopt a consultative selling approach:

• Educate, Don’t Push: Explain the benefits of service contracts, such as financial security against unexpected repairs.
• Use Visuals and Data: Present real-world examples of repair costs without coverage versus with a service contract.
• Personalize Recommendations: Tailor service contract options to the customer’s driving habits, vehicle type, and budget.

4. Master Digital Tools

Technology is reshaping the way dealerships operate. Finance managers should familiarize themselves with digital tools to streamline processes and enhance the customer experience:

• E-Menu Selling: Simplifies presenting service contract options and increases transparency.
• CRM Systems: Tracks customer interactions and preferences, allowing for personalized follow-ups.
• Online Financing Platforms: Enables a seamless online-to-offline experience for buyers.

5. Build Trust Through Transparency

Building customer trust is essential for closing deals. Be upfront about what service contracts cover and any exclusions. Highlight the value-added benefits, such as roadside assistance, rental car coverage, and trip interruption protection, which are often included in VSCs administered by DRC.

6. Adapt to EV and Hybrid Market Growth

The rise of EVs and hybrids presents unique challenges and opportunities for finance managers. Service contracts for these vehicles often include specialized coverage for high-tech components like batteries and charging systems. Understanding these offerings and their benefits will be crucial as the market share of EVs continues to grow.

7. Enhance Collaboration with Sales Teams

A strong partnership with the sales team ensures that service contracts are introduced early in the buying process. Regular meetings, joint training sessions, and open communication channels can align sales and finance strategies, increasing product penetration rates.

8. Focus on Compliance

The regulatory environment in automotive finance is complex and subject to change. Staying compliant requires a deep understanding of state and federal laws. Leverage resources and training from administrators like DRC to ensure your dealership operates within legal boundaries, protecting both the business and its customers.

9. Track and Analyze Performance

Data-driven decision-making is essential in a competitive market. Use dealership management systems (DMS) and analytics tools to track performance metrics such as service contract penetration rates, average revenue per unit (ARPU), and customer satisfaction scores. Identifying trends can help refine strategies and set realistic goals.

10. Prepare for Economic Fluctuations

Economic uncertainty can impact consumer buying behavior and lending standards. By diversifying offerings, such as promoting prepaid maintenance plans or gap insurance alongside service contracts, finance managers can provide comprehensive solutions that appeal to cost-conscious buyers.

By implementing these best practices, automotive finance managers can adapt to the shifting landscape, meet customer expectations, and drive dealership success. For more information on training and resources, visit Pessada’s Education Center and Dealers Resource Center.