How increasing Finance Penetration can add an extra $66k Gross Profit per month to your Sales Department.

How increasing Finance Penetration can add an extra $66k Gross Profit per month to your Sales Department.

Where can you grow profit in a tougher market?

With market conditions becoming more uncertain, dealers must optimise every opportunity they can.

For the majority of dealers, Auto Finance presents a performance opportunity that can cascade to significant profit growth.

Complete the FREE online Finance Penetration Optimisation Assessment. 

The cascading impact

Increasing F&I (Finance and Insurance) penetration has a significant impact on a dealership because finance conversions affect multiple key metrics that contribute to overall profitability.

Increase Finance Penetration

The cascading impact

Let’s look at these cascading effects:

Here’s some examples:

  • More Finance Commissions: Directly increases gross profit from finance deals.
  • Easier Sales Closures: Financing helps streamline the sales process, making it easier to close deals.
  • Higher Vehicle Sales Volume: More sales are made when financing options are readily available.
  • More Trade-Ins: Increased sales lead to more trade-ins, providing opportunities for additional revenue.
  • More Used Car Sales Opportunities: Trade-ins lead to more used vehicle inventory, which often yields higher profit margins.
  • Improved Gross Profit Per Unit: Finance deals typically result in better overall gross profit on vehicle sales.
  • Increased Service Department Traffic: More vehicle sales mean more customers who will likely return to the dealership for service and maintenance, boosting after-sales revenue.

Let’s take an example:

John’s Auto Dealership

A $66,000 Monthly Transformation

After improving F&I penetration, John’s dealership closed 8 more finance contracts in one month, adding $16,000 to his bottom line.

Next, the dealership improved their sales process, increasing vehicle sales by 5%, which brought in another $10,000…

The dealership also encouraged more trade-ins, resulting in 4 more per month and contributing an extra $12,000.

They streamlined operations, improving gross profits per vehicle by 5%, adding another $10,000 to the bottom line. Aftermarket sales, thanks to a new strategy, contributed
$10,000 more per month.

Finally, streamlining administrative tasks led to a reduction of one staff member, saving $8,000 per month.

Total Transformation: $66,000 in Additional Monthly Profit.

What could your dealership do?

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For more information, please contact:

Ann Cawkwell: +61 410 854 970

Tim McGrath: +61 408 900 130