H&R Agri-Power stresses F&I amid tight financing

Agriculture equipment dealer H&R Agri-Power is emphasizing strong finance and insurance operations as high interest rates persist and customers seek favorable terms. 

With the equipment industry awaiting rate cuts, implementation and effective use of finance tools remain key to dealer operations, Josh Arnall, finance & insurance (F&I) manager at H&R Agri-Power, told Equipment Finance News.  

“We’re always seeking to improve understanding and implementation of our financing tools,” he said. “This could be done by internal training and continuing to develop internal finance tools.” 

In the high-interest rate environment and overall tight macroeconomic conditions, dealers face more scrutiny from customers who want more favorable terms to protect against high rates and projected lower farm income, Arnall said.  

The need for terms deemed satisfactory for customers plays a key role for the dealer, he said. “Deciding lender partners depends on subsidized programming capabilities, rates, credit parameters, ease of doing business … the overall value proposition to us as the dealer that we can clearly communicate to the customer.” 

Location, equipment management 

To give customers the best F&I experience, H&R Agri-Power offers the best financing packages to its 21 locations based on each site’s needs, Arnall said. 

“It depends on the location. At some locations, we have dedicated F&I employees and at others the salesperson handles the process,” he said. “The objective is to get the best finance package, in terms of lender, term, rate, structure, fit the first time.” 

H&R Agri-Power manages primarily regional sales “with some super-regional sales and a few international sales,” resulting in $45 million in monthly sales across the dealer group’s more than 80 suppliers, Arnall said. The group’s major brands include Case IH, Kubota, New Holland, MacDon, Kinze, Great Plains, Land Pride and Bush Hog. Each equipment type needs its own F&I process. 

“If it’s a combine, the deal might be made in the farm office, but if it’s a Kubota subcompact, the deal could be started on the lot and completed in 20 minutes,” he said. “Financing is almost always part of the conversation. Providing financial solutions for customers is more important than providing a piece of iron, as anybody can do the latter, but not everyone can do the former.”

F&I best practices 

Although customers continue to seek favorable, H&R Agri-Power continues to quote insurance products on every deal, Arnall said. 

“H&R has been a high performer on [pre-delivery inspection] and extended warranty products for nearly 20 years, but we can certainly improve salesperson participation and deal penetration on these products,” he said. 

By quoting and adding insurance products to deals, H&R Agri-Power maintains a “one-stop-shop relationship philosophy,” which also helps the parts and service business, Arnall said. 

Meanwhile, H&R Agri-Power continues to refine its financing, including development of custom sales and management software called Power EQ. 

“We are always seeking to improve our processes and tools, and Power EQ is a daily part of those efforts,” he said. “One of the new items on which we’re working is a finance quoter that ties directly into the sales analysis/customer quote.” 

Register for the 2024 Equipment Finance Connect, which focuses on best practices in equipment finance, on May 5-7 in Nashville, Tenn. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.