The Road to ROI with F&I

Why Dealerships Should Consider Dealer Equity Programs

Posted by Steve Memolo on Sep 27, 2021 10:00:00 AM
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Several traditional revenue centers exist in a typical automobile dealership, including vehicle sales, service, finance, and insurance (the latter two are known as "F&I"). However, there are other revenue streams available to auto dealers these days that they may want to take advantage of. Any automobile dealer interested in increasing revenues while also improving customer satisfaction should consider setting up a Dealer Equity Program of their own.  

Defining Dealer Equity Programs

As an automobile dealer, you can set up a separate Dealer Equity Programs within your dealership to provide a wide array of products. These offerings include warranties, gap insurance, vehicle service contracts, collateral protection, and Certified Pre-owned (CPO) vehicle designations, most of which are either sold by sales staff or by F&I managers during the document signing or "sign-up" process.

Many programs already exist in the market. Still, they frequently sell them on behalf of other Equity Programs and receive a small commission in return, a portion of which typically goes to the selling salesperson or F&I manager per their pay plan.  

Dealer-Owned Equity Programs

Dealerships, though, can benefit from their Dealer Equity Programs, including:

  • By setting up a dealer-owned Equity Program, dealerships keep a more significant share of the profits from the F&I products they sell. 
  • Dealer-owned Equity Programs also gives dealers complete control over their product offerings, letting them do what's best for their business and their customers, which increases customer satisfaction.  
  • Dealer Equity Programs also often delivers a better return on investment than almost any other endeavor within an automobile dealership.

Setting up Dealer Equity Programs

Many Dealer Equity Programs provide many types of benefits. Always seek professional tax advice. Whether you have a program already set up or not, it’s always good review what’s new in today’s market. You should always be looking to see what the right fit for you and your dealership is.

Our automotive consulting firm provides a wide selection of aftermarket and F&I products for dealerships. We also offer free sales training events and training on federal and state auto dealer compliance requirements, among other services. Contact us, and we'll show you what we can do to improve your dealership's profitability and customer satisfaction.

Topics: Dealer Equity Plan, Dealer Equity programs

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