The Evolving F&I Experience

In last month’s staff blog, we touched on the fact that more and more, consumers are looking to do research online of not just their vehicle brand and model, but of the F&I products available to go with it — and they are finding, for the most part, little to no information. But it goes deeper than just buyers looking for online information — the F&I experience can be unpleasant. We can try to rationalize it any way we want, but the fact remains that not even those of us in the industry are immune from having F&I “horror stories.” And that’s a problem.

Speaking on condition of anonymity, several industry executives relayed those stories. They help illustrate that it isn’t a lack of knowledge on the customer’s part that can make the process so painful, but rather a system that hasn’t evolved much from the way it was first conceived and sold.

These stories come from executives with similar problems. Both are incredibly busy, but knew exactly what car they wanted, what F&I products they wanted to purchase, and exactly what they were willing to pay for it. In the first case, the executive in question called several local dealerships, trying to find someone willing to do the deal over the phone, so he could have the contracts ready to sign when he arrived later that day to pick up the car.

That proved next to impossible. What he had thought would be a way to shorten his time in and out turned into a week-long back-and-forth game of calling dealerships and either being brushed off completely, or being strung along until it came time to talk numbers, at which point they started insisting he come in to do it in person. Which was exactly what he was trying to avoid.

At that point, he started calling dealerships outside his immediate area. In the end, he bought a luxury brand, with F&I products, from a dealership several hours away, who was more than happy to do the deal over the phone. He drove up on a Saturday, turned in the trade vehicle, signed the papers and got out. And he still takes the car for service to the local dealership who refused to do business the way he wanted. But that dealership lost out on all the profit from the initial sale because they would only do business with him if he would do it their way.

In the second case, the executive in question had a similar dilemma — he was too busy to take a day to go sit at a dealership, so he went online. Like in the first case, he went through all his local dealerships of the luxury brand he wanted to buy — he even talked to the F&I manager of one that he was acquainted with. That manager told him that Internet buyers aren’t a priority, and aren’t really “serious,” so they are routinely ignored.

In the end, like with the first executive, this one ended up finding a dealership located hours away, who was willing to work with him via email exchanges. He spent a great deal of money on a new vehicle with upgrades and F&I products, and this after his local dealership wrote him off because he wasn’t considered “serious.”

Both of these examples illustrate the fundamental flaw in F&I today — as an industry, we have “always done it this way” — we have always had the office in the back room where the customer comes in after the sale, and, in almost every case, the customer spends hours going through the process. But today’s world is quite a bit faster than it used to be, and consumers, more and more, just aren’t willing to give a dealership that much of their time — they recognize that their time is a valuable commodity, and they are far more stingy with it than they were in years past. And the Internet, and the culture that has grown up with it, will only continue that shift.

Dealerships who insist that only the traditional customer who doesn’t place a value on their time is worth pursuing will find themselves struggling to hold on to business. As these examples show, people are aware that the local branch isn’t the only option, and that they can get the exact same car elsewhere, with a dealership who recognizes that people today want options. And not just on seat trim and technology packages, but on how they go through the sale process itself.

So what should providers be doing to help capture this market? First of all, providers need to make it easier for dealerships to educate and sell to those alternative customers. They are a small subset today, but that number is growing exponentially every year. Providers who make their products and process easily accessible to online or phone researchers and buyers are going to have a much easier time retaining dealerships and signing up new clients.

Second, providers, either direct or through their agents, need help educate dealers that customers who are looking for alternative buying experiences are still customers — people who want to spend money with the dealership. To treat them as throw-aways or “not serious” means losing a customer, and possibly more than one, as that person talks about their experience to others. A lost customer for the dealership means a lost customer for F&I products as well. There’s no guarantee that the dealership the customer ultimately buys from will be selling your products.

It’s to everyone’s benefit to stop looking at online and phone customers as lesser than the ones who show up in person. As an industry, we need to spearhead that shift in attitude, so that everyone, from the dealers, to the customers, to the providers, can find a process that is profitable and satisfies the convenience and speed factors that today’s up and coming consumers are looking for.