Motorcycle Insurance Eagle River AK
Finance & Insurance Numbers
At GSA we track benchmarks through our involvement with dealer groups, such as the Best Operators Club. The BOC group's by-laws require that all members provide accurate dealership operations data on a monthly basis. Some of the members have kindly consented to let us share their numbers from our real-time, web-based data reporting system.
This column explores the F&I department benchmarks and dealer data. Future columns will address the numbers from the other departments. We will discuss what we measure, and why, as well as examine the current BOC benchmarks.
The charts presented here depict actual December '07 F&I Department numbers for one of the BOC dealers. This is a fair-sized, multi-line dealership located in a southern town of around 65,000 people. There are no major metropolitan centers nearby. This dealer maintains a high-quality facility and stocks a wide product selection.
Their total unit volume for motorcycles, ATVs, UTVs and PWCs in 2007 was just more than 1,200 units. They have become the dominant dealer in the region, due in large part to their well-trained, professional staff and their commitment to outstanding customer service. This fact is demonstrated by the volume they sell in a relatively small market. What's more, this dealer is not getting these numbers by discounting his prices. Chart 1 verifies this. He is at or above most of the benchmarks and above the TBOC (which stands for Top Best Operators Club in a category see "Lingo").
This dealer had one manager and one support person processing all the F&I customers. This is a highly-capable and productive F&I team. They had 312 deals financed inside and only three deals went to outside financing. This means this dealer is exceptional at conversions. They were able to convert customers from financing with banks, credit unions or even paying cash to dealer financing. Why is this important? In the following charts this dealer averaged over $500 in finance profit alone! In addition, customers who finance with you are much more likely to buy additional F&I products as well as clothing and accessories.
Applications submitted, turn-downs and approved applications that did not buy also need to be tracked and monitored. Following up with any customers who were approved but did not buy is extremely important. All this data provides important information that management can use to develop processes that improve the performance of the F&I department.
This dealer is very good at F&I. Just look at the 79% of deals financed and the 68% ESC penetration. As you can also see from chart 2, they have beaten many of the benchmarks as set by the BOC members and are out-performing the TBOC significantly.
So, just how profitable was F&I for this dealer? Look at the details in chart 3. In December they sold $118,657 in F&I products for a gross profit of $72,319. For 2007 they sold over $1 million in F&I! Could y...
Insure Yourself Against Insurance
A beaming customer is sitting at the table across from you, going over documents; he is in the process of buying a motorcycle. He has gone for a test ride and is in love with that bike. He has picked out all the accessories he wants, and his credit is more than solid. What can go wrong with this deal?
In most states, you have to buy liability insurance to legally ride a motorcycle on the street. In addition, most finance companies demand that the buyer purchase comprehensive insurance to protect the investment of the lender. Is this customer insurable? Can he afford insurance for the bike that he wants?
“Insurance is not something most dealers address,” explains Gart Sutton, president, Gart Sutton & Associates, a powersports consultancy. “It’s low profit, and unless you have a license, you can’t sell it, so most dealers refer the business to an agent.” However, these dealers are ignoring a vital element of many motorcycle sales: Telling a customer to go out and buy motorcycle insurance might have been OK two years ago in flush times, but now, when every sale counts, you don’t want to break a deal because the customer can’t find affordable insurance that meets his or her needs.
Mike Felder used to run a Honda dealership before he went into selling motorcycle insurance full time, becoming one of Progressive’s best agents. “Don’t leave insurance to the customer,” Felder says. “You have to know bike insurance, what variables there are that will reduce the premium, and which companies charge more for insurance for the bike your customer wants to buy. If the customer can’t get insurance, or can’t get affordable insurance, you lose the sale. You lose the commission, the service contract, the accessory sales, the service work and the referrals.”
In fact, only a minority of dealers sell insurance, and it certainly isn’t for the cash — the commission on each insurance application is not very high. These dealers do it only because it gives them an edge on sales.
“It’s a convenience for the customer,” says Teresa Mar, business manager of Mission Motorcycles and a licensed insurance agent. “They can take the bike home that day; they don’t have to hunt down insurance.”
Even if you don’t sell insurance yourself, acquiring an in-depth knowledge of who is selling motorcycle insurance in your state, which insurance companies have surcharges that apply to the lines you sell, and what discounts are available, won’t cost you anything but your or your salespeople’s time. This information provides immediate, tangible value to the customer and an edge to you.
“Knowing about insurance in my state is just part of good customer service,” says Maya Lai, saleswoman for San Jose’s Moto Italiano. “We have a good working relationship with an insurance agent and, in addition, we finance through State Farm. A lot of the people I see here are worried about insurance. The fact that I can often help them makes it much easier to sell them a bike.”
Lai remembers ...
Selling Insurance at Your Motorcycle Dealership
Property and Casualty agents soar around dealerships like buzzards picking up money you left laying on the ground.
I recently moved to a new state and asked a neighbor about where he takes his bike for service and where he gets insurance. He said, “Just take it over to my buddy Mike’s place. They do it all, and the girl in the office will fix you up with the insurance.”
I dropped my bike off for service and asked about insurance for my bike It seems that not only was Cindy the F&I manager, but she was also the onsite insurance rep.
Cindy works in a dealership that used to use a large volume call center agency that the customer would be on the phone with for a lengthy period of time, and that seemed to interrupt the customer flow. They then tried using a local person that brought in doughnuts and promised better service, but it still took longer than they would have liked, and forced them to give up control of the sales process for a period of time. Then, a question popped into the owner’s mind, ”Why can’t I just handle this myself?”
In many states, it is possible for a dealership to acquire the necessary licenses and insurance company appointments to offer property and casualty insurance to their own customers. There are usually required classes and exams, but many dealerships have found that the rewards far outweigh the efforts involved.
I followed up with Cindy’s boss Mike, and this is how the process worked in their store: The owner of the store obtained a license for himself and the dealership to be able to offer the products by going to a three-day prep class and taking a state exam.
He sent his F&I staff to a similar class where they also obtained proper licensing.
The dealership and individuals obtained the required errors and omissions insurance policies required to protect themselves against liability.
He contacted insurance carriers that his customers used and asked for the agent appointment office. He obtained appointments from a variety of very well-known carriers.
Once the appointments and licenses were obtained, all of the salespeople were trained to ask everyone who their insurance carrier was, and if they would be interested in a quote.
During the first F&I interview of the sales process, insurance info is obtained by the F&I manager so that a quote can be ready when the customer is delivered to F&I for the menu presentation.
The dealer raved about the results, not only in profits from the sale of the product, but also in the ability to offer insurance as a customer retention method. The benefits were many:
It streamlined the sales process and kept the dealership in control.
The salespeople always had something to open with if they could not come up with their own greet.
Through policy updates (including premium bills) the dealership name was kept i...
Alaska Motorcycle Insurance Regulations
Motorcycle License Requirements:
Applicants between the ages of 16 and 18 cannot successfully apply for a motorcycle license Class M1 until they have had a learner's permit for at least six months. Also, those younger than 18 must have their parent's permission in order to operate a motorcycle. You cannot qualify for a motorcycle license in Alaska unless you are eligible for a regular driver's license but you cannot hold a normal vehicle license if you're aiming to earn a Class M1 motorcycle license. In Alaska, it is necessary to pass the written motor vehicle test as well as a specialized motorcycle knowledge test. An optical exam must also be successfully negotiated before the final hurdle, the motorcycle road test is attempted. Those who has already passed the Motorcycle Safety Foundation test will not be required to take the motorcycle road test.
Minimum Insurance Coverage:
It is against the law to operate a motorcycle on the open road without possessing a certain level of insurance. It is not necessary to purchase insurance if you are able to self-insure or post a bond with the DMV. However, neither of these methods are practical and can cost more than purchasing regular motorcycle insurance. In Alaska, the minimum insurance requirements are $50,000 worth of coverage for bodily injury per person, $100,000 for bodily injury per accident and $25,000 for property damage liability. Bodily injury covers the physical damages suffered by the other party and property liability insurance takes care of any damages their property incurs. Yet the above minimum requirements don't cover your injuries or damage so it is wise to purchase a higher amount to cover yourself.
Helmets are required for all passengers, drivers younger than 18, those taking the road test and for anyone who only possesses an instruction permit. Considering the fact that head injuries are a common result of motorcycle accidents, it would be prudent for all drivers to wear them to prevent injury or even loss of life.