Dealer group attributes ‘record year for F&I’ to the company’s emphasis on personnel development, and manufacturers’ keenness to promote finance deals
JCT600, which operates 20 franchises in Yorkshire and the north east, now makes an average profit of £465 on F&I per vehicle sold, up 15% on 2010.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Finance penetration for the year was steady at 59% for new cars and up by one percentage point to 49% for used cars, while GAP penetration has returned to the 2009 figure of 60%.
PCP penetration has steadily increased from 24% in 2009 to 30% in 2010 and 38% in 2011.
"There’s a lack of consumer confidence," JCT600 finance and insurance director Simon Barrass told delegates at the Finance & Leasing Association [FLA] 8th Annual Motor Finance Convention. "But if you do your job right you can make some money and sell some cars."
Barrass pointed to the expectation of the group to sell 20,000 units this year which, when multiplied by £465, accounted for "a healthy amount of money".
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataTo this end, JCT600 has hired three F&I managers who Barrass believes "are certainly increasing the amount of business and the amount of profitability".
A strong trend in such business has been the increase in carmakers’ involvement in finance arranged by the group. "Four years ago, Porsche would not do PCP, now it’s 70% of Porsches financed," said Barrass.
Across all brands sold by JCT600, finance volume placement has shifted from a near even split (of £124m of financing) between manufacturers and independents in 2005, to 89%/11% respectively, in 2011 (of £124m of financing in the year-to-date).
A lot of manufacturers have already ‘bought the ticket’ on finance deals, said Barrass.
"It’s now a no-brainer. Less than 1 in 10 deals I’d go to an independent for instead of the manufacturer."
Barrass also expounded the need for motor finance companies to invest in both staff development and compliance as "sales aids".
JCT600 was also one of the first companies to gain Specialist Automotive Finance (SAF) approval, championed by the FLA as a means to accredit product knowledge and provision of customer information.
"SAF is there to be used," said Barrass. "It’s working. It’s certainly helping our business."
Barrass said that compliance, instead of being considered a burden, drives value and "has been an absolute revelation for us. We do it right every time. I welcome it".
Though JCT600 outsources its compliance, Barrass was keen to point out the company’s embrace of the Consumer Credit Directive. "Anything that increases F&I sales is a good thing. In the consumer’s eye, it’s good for the industry," he said.
The group regularly holds F&I masterclasses, including seminars on prospecting, and tries to make F&I fun and competitive for staff, with rewards funded by money held back from volume bonuses.
JCT also helps run the degree-level Professional Certificate in Auto Management, taught by Professor Peter Cooke, to assure a good supply of managers.
There is a want for staff to "be the brand", according to Barrass, and for that brand to be impressive.
"If you don’t have a warm welcome when you come on site, it’s all lost. Happy people will sell more cars for us.
"It’s too easy to blame the economy," said Barrass, explaining that business progression and good management relied on going out and getting customers.
Management, according to Barrass, is making sure "what’s supposed to happen does happen every day" and "drives an additional stream of traffic through good prospecting. Everything stops for a deal".
