The Time Is Now to Embrace Digital F&I

What dealers can learn from Blockbuster’s demise

If you’re of a certain age, you remember Blockbuster, that magical place we flocked to in droves to view rows of VHS tapes of our favorite old and recent movies, all quickly rentable for overnight viewing. In its earliest days, Blockbuster even rented video players to watch the movies we’d rented.

At the company’s highpoint, it even created its own Oscars-like award show, spending millions on publicity rather than investing in technology. And although Blockbuster handled the transition from video to DVD technology just fine, its fate was already cast. By that time, a new company, Netflix, delivered Blockbuster’s entertainment value right to paying subscribers’ living rooms. Netflix moved to on-demand video streaming in 2007. Blockbuster exited the marketplace seven years later.

Increasingly, auto dealers who want to avoid a fate like Blockbuster’s recognize that dealerships of the future (five or fewer years from now) will provide a seamless and near-identical online, digital, and brick-and-mortar experience for consumers, who will control where, when, and how they engage with the dealership.

Leverage disruptive processes for profit

Disruptive processes and technologies chased Blockbuster off the street. Although dealers may not view their dealerships as susceptible to change, disruptive change is pushing core dealership business practices to the side and rewriting how cars are merchandised and sold.

Unlike Blockbuster, the brick-and-mortar auto dealership is here to stay. It will, however, require closer integration with and more seamless transition between online and in-store experiences. Both experiences will need to engage customers using various buying processes supported by multiple platforms.

Many examples of digital’s influence on dealership operations are already place and are pushing against old ways of serving consumers. Consumers, dealers, and OEMs embrace digital and online technologies such as car-shopping websites, service appointment scheduling tools, and credit, finance lease rate, and trade-in calculation apps. In some ways, these digital changes are like those that pushed against Blockbuster’s original business model, which its leadership either did not recognize or ignored until its fate was defined by competitors who did.

Digital impact on F&I

For dealers, the next significant change coming is to the F&I office. We’ve seen disruptive entrants into traditional F&I before in the form of digital tools like e-menu, tablet-based presentations, e-contracting, and online lease and finance rate calculators. Technology’s bigger impact on and integration into a dealer’s online and showroom processes will, however, be dramatic for those who are not already preparing for online F&I.

Consumers recognize the value these disruptive technologies bring to their car-buying process: Technology shortens not just the F&I process but the entire car-buying experience. These e-menu and other digital F&I tools can shorten the F&I process time by 15 minutes or more. That time savings might not seem like much, but it’s critical to customer satisfaction.

Considering that the average sales process, including appraisal, takes more than 90 minutes, changing F&I to save customers’ time is vital. This is why it’s important for dealers to adopt digital F&I tools. This technology can move the entire F&I process along much more smoothly, transparently, and quickly.”

A 2015 AutoTrader study noted that the average time a buyer spends in F&I is 60 minutes, but that paper forms, the signatures they require, and the processing of paperwork can extend F&I processes out an additional 44 minutes.

Don’t delay change

Dealers cannot afford to put off digital change any longer. I suspect that within five years disruptive online technologies will replace the current structure of F&I. Dealers who embrace these changes can better adapt to and thrive in a truly online F&I environment where consumers control their own rates, review and select aftermarket products and their prices, and sign paperwork digitally.

In the meantime, consider employing these digital tools to deliver a more precise and concise F&I customer experience:

  1. E-menus: Whether digital presentation pads, tablets, or even smartphones, interactive menus foster product choice.
  2. Online F&I tools: Put available F&I where digital consumers shop: online.These tools include apps that enable online trade-in evaluation, access to credit reports, and finance and lease rate calculators.
  3. E-contracting: Contract deals digitally. Paperless processes convey more efficiency, conservancy, and technological sophistication than paper-based processes.
  4. E-claims: Buyers, particularly millennials who routinely conduct e-commerce, appreciate that e-claims eliminate the multiple and redundant steps often required should they have a claim against a warranty or other aftermarket product. Their claims get filed and processed faster, and they receive reimbursement or payment on claims sooner too.

Digital F&I will revolutionize how this core profit center functions. Dealers who already embrace this change are removing waste and cost from F&I, and they’re increasing per-vehicle retail revenue and product penetration while delivering a more satisfying and thoroughly compliant car-buying experience for their customers.

Jim Maxim, Jr. is president of MaximTrak Technologies, Reach him at

Jim Maxim, Jr.


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