Who benefits from moving F&I online?
By: Krystyna Lagowski
Both F&I managers and customers stand to benefit from having more of the F&I transaction online.
According to a Cox Automotive online retail F&I study, nine out of 10 consumers are researching their vehicle purchase online, and they are approximately 50 percent more likely to buy an F&I product if they knew about it prior to coming in to the dealership.
“If I was a financial services manager, I’d want to pre-position F&I products so the consumer is excited to learn more about them when they come into the dealership,” says Jeff Schulz, EVP, Marketing, LGM Financial Services. “These products are not well understood by the consumer. The role of the financial services manager is to educate the consumer and to sell them the product that best meets their needs. As dealerships build their online presence, the financial services manager can help provide some of the content around F&I that appeals to the consumer.”
Companies that provide F&I products can also provide consumer-friendly content to help build awareness with the consumer. “By the time the customer gets to the financial services office, the FSM is ready to answer questions,” Schulz adds. “They’re going to be an advisor to the consumer and help them choose the right products that suit their lifestyle and financial needs.
“Initially, the complete transaction isn’t going to happen online very often-but the introduction to F&I products and a lot of the research is going to happen online.”
Education means opportunity
Becky Chernek, President, Chernek Consulting LLC, agrees that it’s beneficial to educate customers. “The more education, the more opportunity. Customers like the perception that they’re in control.” She feels it’s more advantageous to be upfront and transparent with customers wherever possible. “Many of the high-end dealers are doing it, and it’s great for customers to do some of the heavy lifting even before they make their way into the dealership,” Chernek says. “Some of the bigger auto groups are doing it, offering customers the self-desking capability, but not posting products online.
“Maybe at some point during the self-desking process they get to the point of choosing some of the products that the dealer may have available to them.”
In the U.S., online providers like CarMax, Carvana and Sonic are offering customers everything they need to buy a car online. “These competitors are giving customers a way to do business the way they want to do business,” says Chernek. “They’re giving them all the tools they need. They’re making it completely transparent. That’s the competition.”