How to Respond to F&I’s Technological Paradigm Shift

Have you given thought lately about how the technological paradigm shift taking place in the automotive world might change your F&I processes?



The re-imagination of automotive retail is at our doorstep. Is anyone surprised? Look at the age we live in: Compare the technologies you and your family use every day to the technologies and methods used in car dealerships. Should we really be surprised that automotive retail is about to undergo major change?

Given how online F&I might change your dealership processes, need for talent, and opportunities for profit, do you know what you need to do to remain viable and important to the business and its customers?

Change drives online F&I

The following considerations will help you determine what changes to the F&I process may be required to remain viable and important to your dealership and its customers.

  • Customers are experiencing new sales processes in many industries. Auto manufacturers and dealers have a lot of catching up to do.
  • Businesses like Amazon, Google, Apple, and others have revolutionized the retail experience. Changes embraced by these retailers make consumers want these same attributes when shopping at your dealership: at-home convenience, price transparency, and fast service. Today’s buyers know a good experience when they see it; they have zero attention span for poor digital interactions.
  • Consumers spend up to 17 hours online researching their next vehicle purchase before buying, and using multiple channels to do so, including online, mobile, and in-dealership. They want a seamless experience between what they learn about your dealership from their online interaction with your website and what they actually receive when they step into your store. A recent AutoTrader study noted that 72% of customers want to complete the credit application and financing paperwork online, and 71% favor filling out the rest of the car-buying paperwork online.

We see AutoNation, Sonic, and others testing online models designed to help buyers complete most if not all of the car-buying processes online. Buyers would also like to browse, configure, visualize, and buy add-on products online, from service contracts and GAP to accessories and style products.

Develop new F&I now

Considering the previous factors, how does a progressive dealer and F&I manager prepare for the coming F&I environment? These five responses can help you prepare your dealership for today’s digital-everything buyer:

  1. Think outside the F&I box. Business will become less “usual” in the next five years, and the pace of change will accelerate. What if the finance/lease part of the F&I function was transferred out of the traditional F&I office to the general or sales managers (who may have been promoted from F&I)? Could you develop F&I aftermarket product specialists who work with consumers during the deal process to help them better understand the value your aftermarket products offer to protect their investment?
  2. Stretch. A “we’ve always done it this way” attitude will ruin you. Move credit, finance, and lease applications to your website and develop in-store versions that mirror them. Close the impression gap: Does the store’s in-store F&I experience mirror the speed, control, transparency, and flexibility consumers experience when using F&I apps you have on your website? Partner with F&I technology and product providers who can help you learn how to deliver a streamlined digital F&I experience.
  3. Develop your people: Talent acquisition and retention becomes even more critical, partly due to the changing face of the consumer and the changing function of F&I. As millennials take key positions in the dealership and F&I department, keeping them engaged, trained, and performing at optimal levels is paramount. Likewise, train older F&I personnel to relate to these buyers on their terms with the tools they use every day.
  4. Be a learning dealership: Study and discuss this trend within your 20 Group and state association functions. You will likely hear terrific ideas and learn about new applications. Get on top of this paradigm shift so you can champion the changes necessary for your dealership.
  5. Embrace technology: This bears repeating because it can help you remain competitive in these times of compressing dealership margins. Incorporate next-generation F&I technologies into today’s sales and F&I processes.
    For example, bring your dealership up to current-day best practices by incorporating e-menu, e-rating, e-contracting, and e-registration into your F&I. Stop using paper-based processes consumers find slow, old-fashioned, and perhaps untrustworthy. Replace them with digital presentation tools like tablets, kiosks, and pads that let consumer interact with and control the product presentation and selection process, as well as affix a digital signature. Technology speeds a more compliant F&I process that consumers appreciate.

Although a future slowdown in car sales, higher interest rates, or a recession may slow this F&I evolution, change will not stop. Use the present good times to investigate and strategize your dealership’s response. Today’s consumer demands that you be ready. If you can’t or won’t, make no mistake: They will buy from the first dealership that can.

Jim Maxim, Jr. is president of MaximTrak Technologies, www.maximtrak.com. Reach him at maxim@maximtrak.com.

Jim Maxim, Jr.

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