The automotive industry has faced its share of challenges over the past year, beginning with the coronavirus pandemic that forced thousands of dealerships to briefly close their doors.
Now they face a worldwide microchip shortage that has resulted in severely limited inventory. With numerous obstacles slashing revenue streams and a supply shortage that has made it difficult to find vehicles for customers, dealerships are turning to alternative revenue opportunities.
Automotive dealerships drive revenue in several ways. The sale of vehicles in their showroom, the repair of vehicles in the service department, and by offering vehicle protection options in the finance office. The finance office is also where the final paperwork is signed and completed.
To offset a reduction in revenue, some dealerships have begun to enroll their finance employees in F&I School, a vital part of the continuing education of car dealership finance employees. There are only two of its kind in the United States that possess official licensure by their state for automotive finance training. Finance Manager Training, an F&I School in New York, is one of them.
“Dealerships are an important part of local economies. In addition to employing hundreds of people, dealerships also provide transportation to tens of thousands, so it is incredibly important that they stay solvent,” says Ryan Daniel, President of Finance Manager Training.
With a massive chip shortage affecting the automotive industry in 2021, dealerships have been dealt an additional blow on top of the already vast toll that the coronavirus pandemic incurred. How bad is it? “Never seen anything like it,” Tesla’s Elon Musk tweeted last month. With fewer new vehicles produced due to chip shortages, dealerships are now leaning more than ever into selling F&I-related products.
The F&I Manager is the dealership employee in charge of running the finance office, and this is where automotive training schools have stepped in. By helping dealerships become more efficient and by training their employees on how to explain complicated protection options to customers, dealerships are able to offset lost revenue when vehicle sales are down.
Although car sales will likely rebound and chip supply chains will eventually catch up, the trend toward online vehicle marketplaces such as Carvana and Vroom does not appear to be slowing down.
As sales move to the digital realm, online retailers are likely to make an even more significant dent in dealership revenue, resulting in less sales for local dealership operations. With challenges mounting and competitors knocking on their door, dealerships have turned to an age-old solution; Education.