Online F&I – the next step in the digital revolution

One of the main drivers behind the online retailing revolution is the growing number of car buyers who are losing patience with the time spent at the dealership in order to close the deal.

Consumers have become increasingly adept at researching models and negotiating the sales price online. That leaves the F&I process as the next logical target for reducing the time buyers are spending in-store.

Sitting at the dealership filling out the paperwork needed to secure a loan followed by presentations of the various vehicle protection plans late in the sales process is inefficient and has today’s car buyers impatiently checking their watches.

Technology already allows buyers to complete credit-enabled forms, and get back specific lending offers from the dealer’s lenders with precise monthly payments right from the VDPs.

Technology now is also capable of providing F&I product information and menuing online. I believe that this is where the market is going and is being driven by the consumers demand for more transparency and efficiency.

I know this may seem risky at first, but keep in mind that not long ago the idea of providing your inventory information online was a scary proposition. Now, you can’t operate profitably without having online inventory.

Many people in the industry believe that the move to presenting product information and pricing will destroy backend profits. I think that should be a concern, given the important role F&I revenue plays in the overall success of the dealership.

All the same, I believe the concern over moving more of the F&I process online can be mitigated if executed correctly. Here’s why.

The general consumer sentiment about customer service levels at auto dealerships is below what the industry would like it to be. We all know this; it’s not news to anyone.

This emotion is fueled in part by the traditional F&I process where the buyer knows little to nothing about the protection products you offer until they reach the finance office. This sales approach makes the buyer feel apprehensive and somewhat defensive. That’s why many times the buyer’s guard goes up immediately right after they enter the F&I office.

Alternatively, dealers who offer F&I product information and menuing online are giving consumers more comfort and control. Done properly, this can generate greater interest and purchase intent for those the products by letting consumers take in that information on their own time, with no one there to pressure them into buying anything.

The F&I manager still has the opportunity to reinforce the value proposition of the protection products and close the sale when sitting down with the buyer to finalize the paperwork.

Becoming more transparent around the F&I process is a good thing that will increase trust and loyalty between the dealers and their customers, and reduce the time spent at the dealership. I believe this move will also lead to more opportunity for future sales, customer retention and referrals.

Bill Gerhard
Author: Bill Gerhard

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