Canada witnessed a record-breaking surge in new immigrants between 2017 to 2022, according to Statistics Canada. Notably for the automotive industry, the immigration of driving-age population increased by over 2.2 million people during this period, which DesRosiers Automotive Consultants noted was a fertile opportunity for new light vehicle sales (NVS).
While this market is growing, the needs of immigrants differ from those of acclimated Canadians. Canadian immigrants are most concerned with a business’s reputation and will do their research before shopping. They are also highly focused on maintaining their hard-earned credit, especially when making large purchases like a vehicle.
In this article, we’ll discuss how this growing immigrant population is a golden opportunity for automotive dealers to leverage their Finance and Insurance (F&I) departments to address their specific needs. We’ll also answer these questions to set dealers up for success with new Canadians:
- What are the specific needs of Canadian immigrants when it comes to purchasing a vehicle?
- How can F&I help dealers build credibility and trust within this new market?
- What strategy should dealers adopt to help new Canadians safeguard their credit?
Understanding the needs of new Canadian immigrants
Each Canadian newcomer’s situation will look different, but there are some consistencies in their needs that dealers should pay attention to so they can be ready with the right solutions:
Canadian immigrants find trustworthy dealerships through social proof
Did you know that 60% of Canadian newcomers check a business’s online reviews before shopping, compared to only 46% of acclimated Canadians? This demonstrates that Canadian immigrants are concerned with social proof and rely on reviews to find quality businesses.
Knowing this, dealers looking to seize NVS with this market should be adopting strategies to create exceptional customer experiences and maintain their online reputation. We’ll discuss a strategy for this later in the article.
Canadian immigrants want to build and safeguard their hard-earned credit
Another major focus for many new immigrants is on building their credit. Good credit makes all the difference when it comes to getting approved for products like mortgages, credit cards, loans, and insurance policies, and can be impacted by several factors including payment history, debts, and more.
Many OEMs offer programs that help newcomers build their credit, which can be extremely helpful to becoming established in a new country. Equally important, however, is that they safeguard and maintain the good credit that they earn. We’ll discuss later how Loan Protection is designed to address this issue.
How can F&I help dealers build credibility and trust with the new Canadian market?
For the last several years, successful dealerships have been making strides to build their presence and protect their reputation online. Gathering feedback and reviews from customers continues to be a good strategy seeing as automotive consumer review volume continues to grow each year, jumping up by as much as 11% from 2022 to 2023. As immigrants are statistically more inclined to rely on online reviews compared to their acclimated counterparts, protecting an impeccable online reputation for dealerships is paramount in serving this market. A critical facet influencing customer reviews and overall satisfaction lies within the F&I department and the warranty experience. Failure to align with providers who don’t prioritize the customer experience poses a substantial risk to the reputation of dealerships. Warranty providers essentially become extensions of the dealership’s brand, impacting the driver’s ownership experience during repairs or breakdowns. Unfavorable encounters are more likely to be shared online. This underscores the importance of dealerships aligning themselves with industry-leading F&I providers committed to enhancing the customer experience and protecting the dealership’s brand throughout the entirety of the warranty coverage period.
Four out of five global consumers say that a vehicle’s warranty options are important when purchasing a new car. F&I providers like LGM offer comprehensive protection and warranty products and top the online review charts, with an average of 4.4 stars for over 500 reviews on Google (as of January 2024). With the growing market of new Canadians, dealers can no longer afford to partner with F&I providers who aren’t aligned with their customer experience goals.
How can F&I help new Canadians safeguard their credit?
Maintaining good standing credit is equally important as building credit for new immigrants, and financial protection products provide valuable peace of mind should an unexpected and unfortunate life event occur. For immigrants, Loan Protection helps protect their investment on the second largest purchase they’re likely to make after moving to a new country.
What is Loan Protection?
Loan Protection is an F&I product designed to protect a driver’s finances if life takes an unexpected turn. Some of the main benefits of Loan Protection for drivers include:
- Peace of mind knowing that they’ll receive assistance with car loan payments if they become disabled or lose their job;
- Financial protection for families in the event the driver becomes critically ill or passes away;
- Protection to personal savings, investments, and credit ratings; and
- Ensuring the value of other insurance policies that they may hold is maintained.
Drivers also have the option to pick and choose the coverage that best suits them. For new immigrants concerned with their credit, Loan Protection for disability and/or job loss are likely the most relevant.
Learn more: Help your car dealership customers understand how to protect their car loan if they lose their job
How does Loan Protection help Canadian immigrants protect their credit score?
As previously mentioned, many OEMs have credit-building programs that are offered through dealerships. These programs often reward drivers who make their loan payments on time with reduced interest rates.
These programs are ideal for new immigrants trying to build their credit, but it is also important that they understand the potential risks that can affect their credit throughout their vehicle ownership period. Do your automotive customers know that the average car payment in Canada is between $600-900 per month? According to LGM’s team of F&I experts, many automotive customers do not understand that they’re still liable for making these payments even if they become seriously ill, disabled or lose their job.
For most people, becoming critically ill, disabled or losing their employment would be a major financial stressor, and for new immigrants, who have worked hard to build up their credit, these events can be devastating. Even with the maximum provincial and federal employment insurance or disability insurance benefits to support them during this time, this will likely result in a huge reduction in their monthly income. However, with Loan Protection, new Canadians can feel safe knowing that their car payments will be taken care of even if a life-altering event occurs.
Learn more about F&I strategies to help new Canadians purchase and own their new vehicle?
We recommend that Financial Services Managers consider the specific needs of the growing immigrant population in Canada. By understanding their needs and being able to leverage F&I as a solution, dealers are sure to see success with this growing market and help create better vehicle purchasing and ownership experiences for new Canadians.
If you would like to learn more about these strategies and how to incorporate them into your dealership, please don’t hesitate to contact us at Sales@LGM.ca or reach out to your local LGM Dealer Development Manager (DDM).
