The pandemic has disrupted a number of ways people do business—one of them being how dealerships offer F&I options to customers, according to an industry survey from Protective Asset Protection.
In March 2021, the company commissioned an online survey and included nearly 500 F&I and dealership executives across the United States. According to the feedback, nearly 25% of respondents said the sale of F&I products has increased between 5-10% so far in 2021, compared with 2020.
“With a greater emphasis on digital retailing, online shopping, used vehicle and EV/hybrid product sales, a larger number of dealers are looking for ways to maximize their opportunities in offering F&I products that cater to these shopper needs,” said Rick Kurtz, Senior Vice President of Distribution at Protective Asset Protection.
The company said the crisis created an opportunity for dealerships and their F&I departments to offer more digital tools when consumers are researching and selecting F&I products. Their data shows that 45% of dealerships now make F&I product information available online, followed by financing options/loan application online (35%), and F&I product selection and pricing online (33%).
Another 44% said adjusting products offered based on a consumer’s needs are important and that dealers need to sell F&I products online, followed by the ability for customers to select product and coverage options (41%), and online tools like videos to explain the benefits (38%).
A smaller percentage (2%) said increased coverage for existing protection products (such as VSCs) would have the most impact on improving F&I product sales, followed by a more diverse set of F&I product options (41%), and more F&I products designed specifically for used vehicles (37%).
Finally, 38% said selling F&I along with increased transaction prices represents the greatest opportunity for dealerships in selling F&I products today, compared to pre-pandemic. This is followed by longer loan terms (37%) and more EV/plugin sales (36%).
“Expanded F&I product lineups, customized product offerings and additional F&I product education for both the dealer and their customers are all growing in importance for today’s transaction environment,” said Kurtz.
Protective Asset Protection is a provider of F&I programs and services and dealer-owned warranty company programs.