New vs Used Customers – Identifying Their F&I Hot Button, from GSFS Group.
We have seen major shifts in customer buying behavior since the great recession. In fact we have realistically seen more changes in their buying habits in the last five years than we have in the previous 25! One of the major shifts has been a record in the length of the average loan with a 27.62% increase of new car buyers going 73+ months during the first quarter of 2014 as compared to the same period in 2013. The used car buyer saw an increase of 25.73%. Consumers have spoken loud and clear as they recovery personally from a downturn in income and/or confidence in today’s economy. They still love their cars and are willing to stretch out their loans to have the vehicle they want.
|New Car Buyer||Used Car Buyer|
|Average Credit Score||714||641|
|Average Loan Terms||66||61|
|Increase in 73+ Month Financing||27.62%||25.73%|
|Loans made with Credit Union||9.26%||20.84%|
|Average Amount Financed||$27,612||$17,927|
Secondly, we have seen upbeat projections of new car sales for 2014 from 16 – 17.5 million units. The consumers hunger for the technology that is flooding every new car category rivals that of their hunger for the newest technology in computers and cell phones. Couple these two factors and we are having customers show up in our F&I offices with more needs than ever for the products we offer. Helping customers see their need clearly with an interactive and engaging process can lead to some of the healthiest profits we have seen. F&I managers cannot adhere to a one-size fits all strategy but must develop their ability to uncover the unique motivations, needs and buying factors of each customer and the vehicle they are buying.