5 Questions Every Dealership Needs to Ask Their Broker
Choosing the right F&I broker is one of the most important decisions you make for your power sports dealership. F&I, or finance and insurance brokers are gateways to access consumer financing for many Canadian dealerships, and finding the right one can boast sales and profitability. However, how can you tell if a broker is the right fit for your dealership? We talked to a broker, a dealership and a lender to get their advice on choosing a broker that will fit your business. Here are five questions that we recommend every dealership should ask their broker.
1. Will You Look After My Customers?
It is important, especially for small and medium-sized growing dealerships, to ensure a broker has a personal touch, says Bar T5 Trailers North owner Peter Jensen. His broker Loans2Go helped grow annual sales at his Alberta dealership to almost $5 million by late 2014. “This means a broker that will look after everything to do with your customers once the financing process has started. For us, this was the most important thing: We needed a broker we could trust to guide our customers through the loan process and look after their needs, because as a smaller business we didn’t have the resources to do it ourselves.”
2. Are We Both on the Same Page?
Sit down and outline your business expectations to brokers. Cover topics such as what you expect when it comes to turnaround times on loan applications and what financial products you want them to offer to your customers. “When I was a broker I used to work with a dealer who didn’t want me selling extended dealer warranties,” says Steven Brown, now a Power Products District Manager at a major consumer financing provider Crelogix. “Despite the importance of warranties, he didn’t believe in them and didn’t want me offering them to his customers. Sitting down and working out business expectations such as this with your broker is critical to a successful long-lasting relationship.”
3. Do You Understand How Our Business Works?
Your broker needs to understand how your dealership works, says Lifestyles Financing Services President Glen Usselman. Mr. Usselman spent 20 years working for and owning power sports dealerships, before becoming a broker 10 years ago. “A broker may understand the financing side of the relationship but do they understand what you need from them,” he says. “For example, in power sports demand can be very unpredictable, with many peaks and valleys. So power sports dealers need to ensure their brokers can provide support when business picks up overnight because, for instance, the first snow arrives and suddenly everyone is looking for a snowmobile. You need to ensure the broker you partner with understands what your dealership needs, as well as understanding financing.”
4. Do We Get Along?
Asking the simple question of how well you and a broker get along can make a big difference. You will be spending a lot of time with your broker. If business is good, you will ideally be in contact daily. Not only will getting along make work more enjoyable, but it can enhance customer relations. “If you do not feel comfortable dealing with your broker then chances are neither will your customers, who have formed a bond with you and your dealership,” explains Mr. Brown of Crelogix. “Always ensure you get along with your broker.”
5. What Does Your Business Look Like?
Take the time to assess the brokerage company you want to partner with. “There are a lot of new players entering the market at the moment because they think there’s money to be made,” Mr. Brown says. “Look for a brokerage with a team behind it; one that has been in business for a while and has an F&I background. I think the direction power sport financing is heading, with more and more lending promotions, means the days of one-person operations are dwindling. Because these days power sports brokers need to move a lot of product.” Mr. Brown recommends asking the following questions to a broker, to assess the strength of their business:
- How long have they been in business?
- How big is the team behind it?
- Do they have an F&I background?
- Are they compliant with the regulations of the province you operate in?
- Can they provide referrals?
In a Nutshell: It is All About the Right Fit
Finding the right broker for your dealership can pay dividends, helping increase sales and margins. This means it pays to spend the time finding the right one. Ultimately every dealership’s needs and customers are different – so concentrate on finding the broker that is the right fit for your dealership. A good start is to ask these 5 simple questions to determine how suitable they are for you and your customers.