Work-from-home trend gives sales, F&I staff chance to upsell, GfK says

Consumers who can work from home are more open to splurging on new vehicles than traditional commuters, a paradoxical trend GfK said could benefit dealership sales and finance-and-insurance staff.

"I think there's an opportunity to upsell based on work arrangement," Julie Kenar, GfK senior vice president of consulting, told Automotive News in March.

Consumers who work from home part or all of the time might be more willing than traditional commuters to purchase additional vehicle features or means of making life easier, Kenar said.

"Which is where maybe F&I would come in with some other additional kind of convenience products that they could offer," she said. The propensity to upgrade seen among those working from home arises in both luxury and nonluxury buyers.

At a webinar last month, Kenar said that along with F&I products, dealers also could try and sell "indulgences" such as additional options or even a higher trim level to customers working partly or completely from home.

"Get to know the people who are walking through the door," she said.

Customers working from home also show greater interest in hybrid or electric powertrains, creating another opportunity for dealerships to sell additional products, Kenar said.

"They don't have to drive as much so range anxiety may not be as big a deal to them anymore," she told Automotive News.

Fifty-four percent of workers planning on buying a new vehicle commute daily to their job, while 20 percent always work from home and the other 26 percent are allowed to flex between the two places, according to GfK polling conducted between June and October 2022.

Daily commuters are slightly more likely to be planning a new-vehicle purchase than those working exclusively from home, 45 percent vs. 43 percent. An even higher 47 percent of those with flexible work arrangements are intending to buy a new vehicle.

Consumers able to work outside the office some or all of the time are more likely to have household incomes of at least $75,000 and to purchase a new vehicle within a year. They also are more likely to buy a luxury vehicle within the year and to be ready for a new vehicle within three years.

"I can purchase a nice luxury vehicle and not worry about commuting as much as I used to once upon a time," a woman with a flexible workplace situation told GfK.

Another woman who worked entirely from home said the arrangement enabled her to save on fuel and usage expenses. "I can afford a higher-priced vehicle or one not so economical to drive," she told GfK.

Marvin Eleazer, finance manager at Langdale Ford in Valdosta, Ga., hadn't noticed a trend of customers who work from home buying more F&I products. But he has seen work-from-home consumers upgrading in terms of vehicle selection "because they're driving their cars less."

G.P. Anderson, finance manager at Thielen Motors in Park Rapids, Minn., has seen work-from-home customers buying more F&I products per deal. But he thought these characteristics stemmed from the nature of the work-from-home demographic, not out of a desire for indulgence.

This group, Anderson said, understands technology and values their time.

"If something happens on their car and they're driving their car, they want to be able to get it in, get it out," he said. "They don't want to deal with anybody."

A January GfK poll found 65 percent of people planning to buy nonluxury vehicles within a year said affordability affected their decision, while 58 percent of luxury buyers shared this sentiment. The most popular strategy for managing this issue was not skimping on the vehicle, but reducing other expenses. Among nonluxury buyers, 40 percent said they'd cut somewhere else, while 37 percent of luxury shoppers said they would.

The second most popular strategy adopted by mainstream buyers trying to manage affordability was to switch to a cheaper vehicle, with 32 percent planning to do so. Among luxury buyers, 30 percent said they would search for a longer finance or leasing term. The third most popular strategy was to delay the deal another 12 months, with 29 percent of nonluxury buyers and 28 percent of luxury buyers saying they'd go this route.

Kenar said consumers without a consistent daily commute might be more likely to forgo other spending to get the vehicle they want rather than cut back on the model itself.

"There's definitely this mindset, especially among people who work from home and hybrid workers, who feel that they deserve to be rewarded," she said.