With the amount of competition in the modern market and the rise of online sales, it seems like every industry, especially automotive, is focused on enhancing the customer experience in order to drive sales. For dealerships, this consumer behavior means that fewer customers are coming to them to figure out what they want, because they’ve already done all the research and comparisons online.
However, when it comes to finance and insurance in the car buying process, many consumers lack knowledge and comprehension. It’s important for dealerships to understand why consumers are moving into online sales, recognize this gap in their understanding of F&I, and adjust their approach in order to provide value and ultimately, increase revenue.
THE ATTRACTION OF ONLINE SHOPPING
To consumers, online shopping has many benefits in terms of convenience and accessibility.
The way we communicate as a society has shifted, and often people are more comfortable communicating through text, social media, or email rather than having a conversation. Modern consumers now prefer to “choose” rather than “be sold to”, especially when making an important purchase. Shopping online makes a buyer feel less pressured and more in control—they have the ability to access unlimited inventory and options in order to get exactly what they want. Additionally, consumers are not restricted to locations or business hours online, they can make purchases anytime, anywhere.
The ease of F&I has always been one of the most important factors in car shopping, and an area where shoppers are most dissatisfied. In fact, Cox Automotive reports that satisfaction with the F&I department has dropped 59% in the past year and 63% of car buyers would be more likely to buy F&I products if they could read about them online first. While most dealership websites provide inventory listing, service department information, scheduling, and credit applications online, very few offer information on F&I products.
EDUCATING CAR BUYERS
By providing buyers with basic financial literacy and information online and in person, dealerships can greatly enhance the F&I experience.
To begin, many customers are unfamiliar with common financing terms such as “upside down” or “guaranteed asset protection.” Further, they don’t have an understanding of the relationship between a loan term and interest, or the factors lenders evaluate them on when they apply for an auto loan.
To help provide education, update your dealership’s website with information, videos, and resources that outline the different F&I products and flexible financing options you offer. You should also communicate that some F&I products, such as vehicle service contracts, can be financed through an installment payment planthat offers a variety of terms and zero interest. Knowing these options can put a buyer at ease and further make them feel more in control.
Your dealership can also provide advice on things to consider or prepare before coming into the dealership to purchase, finance, and insure a vehicle. For example, buyers should know their credit score or be aware that some lenders don’t allow consumers to use their car for ride-hailing services like Uberor Lyft.
In the showroom, you can use interactive tablets to allow consumers to explore F&I products and information on their own time on their own path—providing them with a sense of convenience, comfort, and transparency. You can also have sales collateral on hand that clearly outlines the information the consumer needs to know.
THE SHIFTING ROLE OF F&I MANAGERS
Dealerships used to be the primary source of information for car buyers. Now, the Internet is that primary source of information and dealerships are doing less “selling” and more “catering” to clients.
Because most buyers try to complete as much of the car buying process online beforecoming into a dealership, they no longer want or need a salesman to conduct an intake interview to discover their needs and show them all their options.
Often, consumers have a good idea of what they need and want, and are there to take a test drive, inspect the vehicle, and ask specific questions. They simply want to have a conversation with an expert who can provide them with deep level of knowledge and understanding.
While consumers aren’t looking to eliminate the dealership experience, they are now expecting increased transparency—and transparency shouldn’t mean no margin for the dealership. If your dealership’s financing department acts as an open and honest resource for your clients, in turn, it will enhance the customers experience and boost profits.