Dealer Insights - Jan-Feb 2015 - Dealer Digest
Automatic 401(k) enrollment encourages employees to save
America could be on the brink of a retirement crisis. According to some recent studies, including one by financial services company Fidelity Investments, many individuals and couples have failed to set aside adequate money to pay for a comfortable retirement.
Most experts agree that one of the keys to successfully saving for retirement is participating in an employer-sponsored retirement plan. You can boost participation rates in your dealership’s 401(k) plan by enrolling new employees automatically, instead of waiting for employees to enroll in the plan themselves.
Automatic 401(k) enrollment is based on the concept of “negative election.” Instead of opting in to your dealership’s plan, new employees have to opt out of it if they don’t want to participate. To conduct automatic enrollment, your dealership must tell new hires three things:
- They have the right to decline automatic enrollment.
- They can change the amount of money that’s contributed to their plan.
- They can opt out of making contributions altogether, relying on only employer matches to fund the account.
If you choose automatic enrollment, employer matches are required. Contact your CPA for specific guidance on automatic 401(k) enrollment as it applies to your dealership.
Ready for more phone calls?
Many dealerships are reporting an increase in the volume of telephone calls they receive from potential car buyers, while their Internet-generated leads are holding steady.
Some industry observers attribute this to the popularity of smartphones. Many buyers use them to look at dealerships’ inventory listings. When they see a car they want, many call the dealership to make sure the vehicle is on the lot and arrange for a showing and test drive.
Is your dealership prepared for this trend? Now would be a good time to assess telephone training. When hiring employees who will handle the phones, consider candidates from the hotel and telecom sectors — these types of employees tend to have the appropriate skills.
Tips to boost F&I sales
When managed well, an F&I department can be a major profit center. But F&I management is a balancing act. Here are a few pointers:
- Create an F&I selling process and use it consistently with every customer and sale.
- Educate customers about the benefits of F&I products, instead of just trying to “sell” to them.
- Get involved in the front end of the sale to build rapport with customers before their guard goes up.
Dealer Insights - January/February 2015