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Tapping into the Automotive Accessory Market

February 2009, F&I and Showroom - Feature

by Amit Maheshwari

It has a growth rate of eight to 10 percent, the $38 billion automotive accessory business would seem like the perfect way to pick up profits. Yet only 10 to 15 percent of the $38 billion accessory market is sold through automotive dealerships. The bulk of the business is sold through retailers and jobbers. As an F&I professional, you can play a key role in helping your dealership level the playing field.

Although financing reserves have shrunk with the credit crunch, a dealership’s ability to add an accessory sale to a customer’s vehicle financing provides a significant advantage over accessory retailers and jobbers. Instead of a lump sum, your customers see a manageable monthly payment — a big selling point in today’s tight economy.

In this credit market, the challenge is figuring out how to make accessory financing happen. In an environment where many of your customers may not be able to get financing at all, it may seem impossible to include accessories into a vehicle’s financing. However, with the right strategy and situation, this is a sale you can still pull off. And when you can’t, there are other approaches to consider, including alternative financing options.

Sell Accessories Before F&I

The optimal sales process is to introduce accessories after a customer has committed to a vehicle, and before he or she visits the F&I department. Presenting accessories before the customer goes into F&I can lend greater continuity to the overall sales process, as it increases customer engagement and satisfaction.

Using a “traffic-light” customer-credit process can limit the risks of this approach. For example, Loeber Motors in Lincolnwood, Ill., begins the process with a sales associate preauthorizing the customer’s credit for a particular vehicle. Then, depending on the available financing and reserve, the associate codes the customer as red, yellow or green.

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