While the data and poll results were illuminating, the views extracted by its researchers from both retailers and finance companies were equally relevant, contrasting and trenchant.
Lenders appeared to identify declining point of sales (POS) penetration as mainly a ‘dealer problem’, and that the effectiveness of selling finance varied markedly from showroom to showroom.
Retailers countered that they received poor quality F&I training from finance providers and poor service in the franchised arena from captive finance companies, who allegedly did not add value to the business.
But the retailers acknowledged higher POS penetration in outlets with business managers and that FSA insurance compliance fostered a more methodical approach to selling F&I ‘for most dealers’.
They conceded that some staff do not push hard enough on finance (arguable if it jeopardizes car sales, commission and volume bonuses) compounded by a low skill level among sales staff, which came full circle to the training problem.
Finance providers provided a lengthier list of issues and reasons, including the claim that retailers concentrated on finance profit, not penetration, some taking the course of least resistance with F&I.
This included the specific criticism that higher margin insurance products were exploited to hit F&I budgets through lower ratios of success.
Obviously, the comments relate to some and not all, and presumably the same is true when retailers pointed to “too passive and poor” marketing among finance houses.
Under the joint responsibility heading comes the dealers’ complaint that POS offerings do not reach customers soon enough in the buying process.
As a result the argument runs: a high percentage (particularly used car buyers and cash and personal loan users) have already arranged funding. This in turn, argued the respondents, led to a concentration on captive customers.
For their part, the lenders complain about the quality of retail sales staff and the role of business managers, insufficient or ineffective customer vetting and, perhaps most contentiously, F&I not being a dealer management priority.
And to top off the tirade they believe retailers offset the loss in F&I revenue by increasing labour rates and commission.
Although the convention hopefully united finance companies and car retailers in adversity over the declining role of POS finance, the FLA rightly thought it was important to air the grievances before seeking positive solutions and strategies.