How are dealerships handling F&I as vehicle sales move online? The article excerpt below addressed this.
Automotive News – January 13, 2020 – F&I Marketing
“Selling is making people want what you have, and they may not even know they need this product,” said Reahard. “They may say, ‘That’s why I’m buying this Lexus — it’s not going to break.’ What they haven’t thought about is how much more technology there is in this car than their 12-year-old Buick.”
When they do think about the added tech in the vehicles, “That’s what makes the customer say, ‘Well, how much is that service contract?'” Reahard said. “As a finance manager in a dealership, that’s the best you can hope for — that when a customer comes in, they’re interested in your product.”
Paul McCarthy, senior vice president for agency and dealer sales at AUL Corp. in Napa, Calif., describes himself as a “big proponent” of F&I being a part of the marketing arm of dealerships, with marketing dollars spent specifically on F&I.
“Way too often when you go to a dealership’s website, you can find all the information that you want about new cars, used cars, special deals this weekend and why it’s the best time ever to buy a car,” McCarthy said. “But when we go the F&I section, it’s limited information. You can choose your own interest rate and loan term and calculate a payment, but beyond that, there’s not much information.”
McCarthy said it’s worth investing time and money to help consumers understand the products and their benefits because many shoppers will research F&I products online prior to visiting the dealership.
Dealerships, he said, “should be controlling that information and not letting it come from sources that have negative things to say or things that mitigate the sale of these valuable products in F&I.”
About two years ago, Knoepfler Chevrolet switched from selling F&I products to “educating our customers about what their concerns could be down the road and what their options are, whether it’s GAP or service contracts,” said Joe Knoepfler, the dealership’s part owner and director of operations. That’s also when the Sioux City, Iowa, dealership tapped Reahard’s company to provide regular training for its F&I department.
Now, a half dozen of Reahard’s videos reside on kchev.com under its financing tab. The videos, each less than two minutes long, take a consultative slant as they tackle topics such as vehicle appearance protection and guaranteed asset protection, or GAP insurance.
In one video, an ASE-certified master technician works in a service department while explaining — among other things — that having a vehicle’s maintenance performed at the dealership means each time the VIN is entered into the dealership’s computer, the dealership checks whether the vehicle is subject to recalls, service bulletins or software updates.
Since posting the videos on the site in February 2018, and with employee training, F&I sales per new vehicle retailed have doubled and F&I sales per used vehicle retailed have climbed almost 50 percent, Knoepfler said. The dealership typically retails about 140 to 180 vehicles per month, about evenly split between new and used, he said.
