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one of the highest paid employees . He calls the process of grading what ’ s most important to a dealership the “ reciprocal action of F & I ,” which is something he has talked about in his workshops over the last couple of decades . “ You have to look at a product for what it is , what it does , and the benefits , both today ( profit ), as well as in the future . That ’ s how you grade what ’ s most important . And what you sell is the economics of the service contract .”

An interesting statistic that Greenwald told us is that mechanical issues ( i . e ., brokendown machines ) are the number one cause of repossessions in powersports . “ This is why a service contract serves multiple purposes . One , it keeps customers riding , which also keeps them spending money . You don ’ t buy a Toyota Camry and go to the Toyota dealer every year to buy new gloves and a jacket to drive your Camry . We may sell motorcycles as a dealership , but what we REALLY sell is fun

and lifestyle . We sell wants , not needs . And that ’ s the difference between us and the car business . You need transportation to work to earn money to pick up your groceries . But you WANT a motorcycle . So we have to look at what we are selling , and it creates a different avenue to tap into the emotion of the buyer .”

Keeping the customer riding is one of the most crucial things to the success of the machine . Because what we sell is a lifestyle , we sell parts and accessories . You even have Certified Chrome and Motor Clothes consultants if you ’ re a Harley dealer . Some people specifically work with accessorizing both the machine and the rider . So that tells you the value of a customer .

“ Service contracts are always the most important in F & I because , again – this statistic came from banks 20 years ago , and it ’ s still the same today ,” Greenwald adds . “ What is the number one cause of repossessions in powersports ? It breaks . You can ’ t afford to have your car broken down ; you ’ ve got to find a way to fix it because it gets you to your

job . But if you have a side-by-side and the engine locks up , and you ’ re on a tight budget with an $ 8,000 bill , and you ’ re paying $ 350− $ 400 a month for that thing to sit in your garage , then what do some people do ? They say , ‘ You know what ? Come and get it . I don ’ t have the money to fix it . And I don ’ t have the creditworthiness to do it .’”

While service contracts are profitable , according to Greenwald , they are not the end-all-be-all . “ You also have to look for other good F & I products to keep the customer coming to your dealership . I ’ ve been in the motorcycle business since the early ’ 90s . The internet has changed the world . In the old days , the dealer was your source for everything on your bike . But now , if something breaks or a rider gets a flat tire , the customer goes online to find the cheapest tire , or looks around to save money on the repair .”

Greenwald says that due to the internet , customers are less reliant on their local dealer and instead may choose to purchase from online retailers . “ They ’ re going find a cheap

tire , and then they ’ re going to go to some local bike shop , not an OEM dealer , who will do it for $ 30 instead of $ 100 to change the tire out .” He says this creates value for tire and wheel contracts because the customer knows he ’ s getting dealer service , and no money is coming out of his pocket .

In conclusion , certain F & I products not only benefit the customers by saving them money , but these products will also benefit the dealership because it creates profit in multiple ways . Greenwald says there are various profits in a sale . “ The biggest profit is today , but the second biggest profit is , should the customer use it , we ’ re getting a retail repair on the vehicle , and the customer is coming back to us .”

Greenwald reiterates , one of the biggest downfalls of an F & I department is that dealers don ’ t want to invest in it like they should to make it work . He says dealers should be sending their managers to school , always be training and refreshing , and keep them growing . “ Everything evolves , so should your managers !

See F & I , Page 13

JULY 2023 VS . JULY 2022

Dealerships reported a revenue decrease in every department in July 2023 versus the year ago month , according to composite data from more than 1,700 dealers in the U . S . that use the Lightspeed DMS . Combined revenue declined an average of 6.9 % across the nation . In the parts department , the West reported the largest dip in revenue , reporting a 9.8 % decrease . The average dealership saw an 8.5 % decrease in parts sales . The average service department was down 2.3 % in revenue . The Midwest ( 1.0 % decrease ) and the South ( 1.2 %

decrease ) reported the least revenue loss in the service department , while the West ( 4.2 % decrease ) reported the most signifi cant revenue loss . The average dealership reported a 7.3 % decrease in new and preowned sales revenue versus the year ago month . The West reported the most signifi cant decrease of 12.7 %. The Northeast followed , reporting a 9.1 % loss . The Midwest reported the least combined revenue loss , reporting a 3.1 % decline . The South and Northeast followed , reporting less than a 6 % combined revenue loss . The West reported an 11.5 % combined revenue loss for July 2023 versus the year ago month .

PARTS SALES Parts sales revenue was up at 595 dealerships and down at 1154 .

SERVICE SALES Service revenue increased at 759 dealerships and decreased at 927 .

MAJOR UNIT SALES A total of 623 dealerships were up and 938 were down .

FOR MORE ON THE SAME STORE SALES DATA

For more information on this report and other industry data , contact : lightspeeddms . com