Many dealership groups report they are stepping up efforts to sell F&I products to every customer. As a result, higher F&I sales penetration for purchase customers probably also has helped offset any decline in F&I product sales because of a higher lease mix.
All six publicly traded new-car dealership groups reported their average F&I revenues per vehicle were higher in the second quarter of 2013 than a year ago, despite the continuing uptick in leasing.
Sheree Rotterman, performance development consultant at Ally Financial Inc., said in an Automotive News Webinar in May that F&I managers must be persistent in pitching F&I products to lease customers as well as purchase customers.
"The 300 [percent] Rule, we know, is: All products to all customers all the time. It's a good rule. It still stands for leasing," she said. "But the product range is different for the lease customer. It needs to be geared for the short-term customer -- maintenance, key replacement, things that can affect the actual lease-end process as well," such as excess wear-and-tear policies.
She also recommends F&I managers try to persuade cash buyers to sign a lease instead, opening the door to selling lease-friendly products.
The overall benefits of leasing for the industry are a shorter trade cycle and higher customer loyalty. For dealerships, leasing also encourages service retention, since lease units are typically under warranty, experts said.
Rotterman said the long-term benefits of leasing outweigh the potential short-term hit to a dealership's F&I revenue.
NADA's Welch said all things considered, dealers welcome the comeback in leasing: "It's good for business, it's good for the manufacturers, it's good for the banks, too."