As we enter 2025, the RV industry is poised for a potential rebound after recently facing challenges. RV dealers and principals must prepare for a market shift, ensuring they are ready to capitalize on emerging opportunities while navigating ongoing uncertainties.
According to recent data, the RV market weathered significant headwinds in 2024, with sales dropping 10.2% compared with the previous year. However, industry experts are cautiously optimistic about a turnaround in 2025. RVIA projects 2025 wholesale RV shipments to climb to the mid-300,000 range, signaling a gradual recovery.
The association’s optimism can be attributed to several factors, including the potential easing of interest rates, post-election economic stability and the enduring appeal of RV travel among consumers.
New Challenges & Opportunities
For RV dealers, the projected upturn presents opportunities and challenges. The question is: Are you positioned to capitalize during a market revival? Now is the time to assess your dealership’s operations critically and strategize for 2025 success.
Among the most important areas to focus on is the finance and insurance (F&I) department. A robust F&I strategy can be a game-changer for any dealership’s profitability, especially as the market begins to recover. Partnering with the right F&I provider and implementing best practices now can position dealerships for significant gains when the market turns.
Why is F&I so critical? In an industry where margins on RV sales can be tight, F&I products offer a valuable opportunity to boost profitability. A well-structured F&I portfolio can provide substantial additional revenue per unit sold, directly impacting the bottom line.
F&I Strategies
Effective F&I practices can enhance consumer satisfaction by offering valuable protection and peace of mind. Done well, F&I practices can increase customer loyalty and referrals.
To maximize F&I opportunities, dealers should work closely with their F&I program providers to develop a comprehensive strategy, focusing on several key areas.
- Product portfolio optimization: Review and refine F&I product offerings to ensure they align with current market trends and consumer needs. Offerings might include service contracts, GAP insurance, tire and wheel protection and other relevant products to add value for RV buyers.
- Dedicated F&I staff or additional staff: Review and understand how many F&I managers you might need. How many transactions can a finance manager maximize effectively before they start to rely on volume to make their paycheck? Unlike other dealership departments, adding the right individual(s) in F&I pays for themselves and drops profit directly to the bottom line. You should identify the maximum deliveries for each manager to process monthly and not be afraid to add employees when you consistently exceed that per individual amount.
- Staff training and development: Invest in ongoing training dealership-wide for the F&I team, sales, parts and service departments. Knowledgeable staff who effectively communicate F&I products’ benefits to customers are crucial for success.
- Process improvement: Streamline F&I processes to make them more efficient and customer-friendly. To do so, you could implement digital tools for quicker and more transparent transactions.
- Compliance and ethics: Ensure F&I practices adhere to all regulatory requirements and ethical standards. Remaining compliant protects the dealership and builds consumer trust.
- Data analysis and performance tracking: Use data analytics to monitor F&I performance, identify trends and make data-driven decisions to improve offerings and processes. By focusing on these areas now, successful RV dealers can build a strong foundation for F&I success in 2025 and beyond. Remember, the goal is not just to be ready when the market turns but to be ahead of the curve, capture market share and maximize profitability from day one of the recovery.
Changing Customer Preferences
Considering the broader RV industry as we enter the new year is also important. The market is evolving, with changing consumer preferences and technological advancements shaping the future of RV travel.
For instance, a growing trend toward sustainability in RV design and operation has increased demand for eco-friendly features like solar panels and energy-efficient appliances.
Dealers who can adapt and incorporate these trends into their F&I offerings may have a competitive advantage.
The digital nomad lifestyle also continues to influence the RV market. As more people embrace remote work, the demand for RVs with features supporting remote work and schooling will likely grow. Dealers should tailor their F&I products to meet the needs of this emerging consumer segment.
As you prepare for 2025, taking a holistic view of your dealership’s operations is vital. F&I is a critical component, but it should be only part of a broader strategy that includes inventory management, service department efficiency and consumer relationship building.
For example, using data analytics to optimize your inventory can ensure you have the right mix of RVs to meet customer demand. Similarly, improving service department efficiency can enhance consumer satisfaction and create additional revenue streams.
In a competitive market, building loyalty can be a key differentiator. Consider implementing customer outreach programs, leveraging digital marketing tools and providing exceptional after-sales service to create lasting consumer connections.
Aligning Best Practices in the Coming Year
It is clear that the RV industry is poised for change in the coming year. Although challenges such as regulatory hurdles and economic uncertainties remain, the outlook is cautiously optimistic. RV dealers who take proactive steps now to optimize their operations, particularly in F&I, will be positioned to capitalize on the anticipated market recovery.
The key to 2025 success lies in preparation and partnership. By working closely with the right F&I provider, optimizing product portfolios and implementing best practices across the dealership, businesses can ensure proper readiness to seize future opportunities.
Do not wait for the market to turn before acting. The time to prepare is now. Invest in F&I capabilities, refine operations and build strong consumer relationships. By doing so, dealers will be ready for the 2025 market recovery and poised to lead the pack, maximizing profitability and driving growth in this exciting new chapter for the RV industry.
Remember, the RV industry’s success is not just about riding the waves of market trends. Success is about being prepared to catch the wave when it comes. By partnering with the right F&I provider and implementing a comprehensive strategy now, dealers can ensure they are surviving and thriving.
JD Baker has spent a dozen years with Protective Asset Protection, moving from a regional manager to the company’s vice president of specialty sales. Baker has over 25 years of experience in finance and sales.
