There is a definitive coming of age happening across the Recreational Vehicle (“RV”) industry. The RV market in 2023 is strong with continuous overall shipment and sales growth. RVing is hugely popular among US consumers, with over 11% of US households owning an RV. It’s also becoming increasingly desirable for millennials, with over 15 million of them owning RVs.

As this sector of the industry continues to grow, we are seeing a shift towards a higher appreciation and focus on F&I processes. However, RV ownership cycles have shortened significantly in the last couple of years. This was caused by a boom in sales and increasing demand during the pandemic that coincided with an inventory shortage. Dealers began to make aggressive buy back offers and led customers to trade in or trade up earlier than they otherwise would have. Cancellation chargebacks are hitting RV dealers at unprecedented rates.

Economic Climate Fluctuations

When interest rates and gas prices are on the rise, a slowdown in traffic and volume are bound to follow. Further, when inventory is higher and demand lowers, front end profits will come down as dealers begin to compete for customers. It’s imperative to shine a brighter light on finance as sales volume declines. This is the best way to ensure that value and profits are not being left on the table. Serving up the right mix of products to clients will be key for continued growth and success. It’s time to maximize profits in F&I by placing the emphasis on non-cancellable products and properly structured programs.

Thinking ahead and developing a high performing finance department will be a game changer for many RV dealers. The key elements for your F&I department should include:

• Ongoing sales training for your F&I team members
• Strong coordination between the Sales Team and F&I, with a plan for introduction of F&I earlier in the process, followed by a proper hand off after the sale is completed
• A product mix that aligns with customer needs that is reviewed and tweaked for maximum efficiency

Non-cancellable products to consider include appearance protection products, tire and wheel programs paired with a chemical sealant, as well as recovery/theft deterrent products including GPS and etch. GAP is also a product that has a high value proposition with values currently inflated and facing a certain decline. Does that 7- or 8-year GAP term required by your current provider really serve you and your customer’s best interests?

RVs require more protection than traditional ICE and EV automobiles

These F&I products will help give customers peace of mind and maximize the return on their investment. Today’s buyers recognize the value of VSCs and other F&I products. It’s on the finance department to show them how important having these coverages are.

Contact Joe LaPelusa regarding all things related to F&I and RVs at joelapelusa@ezvds.com.