No matter what challenges the automotive retailing industry faces, one goal seems to remain the same: boost profits as much as possible by selling F&I solutions.
Even with pandemic inventory struggles, F&I revenue for some of the largest dealership groups increased 4.5% year over year from 2019 to 2020.
While most other F&I categories held steady in terms of share of F&I sales, the growth of one category stood out: theft deterrent systems. According to the Protective Asset Protection 2021 F&I Trends Report, 21% of dealers reported selling theft deterrence prior to the pandemic. That number has jumped to 31% of dealers today.
That’s because while the increase in vehicle prices due to high demand was good for dealerships, it was also good for car thieves. According to a National Insurance Crime Bureau report, almost a half million vehicles were stolen through June 2022, adding up to an estimated $4.5 billion in losses. Compared to 2019, that number is up 25%.
“There is very little deterrent to stopping these criminals because vehicle thefts are property crimes,” said David Glawe, president and CEO of the NICB. “Since the start of the pandemic, used car prices have increased 35% to 40%. Criminals are exploiting these high prices as vehicle and catalytic converter thefts are crimes of opportunity. And crime is a business, and business is good.”
What Can You Do?
The NICB data shows that reporting a vehicle as soon as possible after it’s stolen increases the chance of recovery. If a vehicle is stolen, drivers should call law enforcement and their insurance company immediately.
However, there is another option for car owners and dealerships that are victims of theft, if they were prepared and purchased a GPS tracking service. Geotracking can let a dealer know the minute a vehicle leaves a designated area or allow an owner to locate a missing vehicle in real time. When a dealership protects and equips its inventory with location devices, the dealer can sell those services to the new owner, increasing F&I sales.
Unfortunately, most industry experts are predicting that vehicle thefts will continue trending upward. Being proactive with your theft deterrence systems can put you a step ahead of criminals and protect your investments.