Putting F&I Online Increases Profits, MakeMyDeal Finds
A new study from Cox Automotive company MakeMyDeal found that 63% of consumers would be more likely to buy F&I products if they could learn about them on their own time before entering a dealership.
ATLANTA —A new study from Cox Automotive company MakeMyDeal found that shifting F&I product information online could be the key to higher sales and profitability.
According to the MakeMyDeal 2015 Finance & Insurance Study, 61% of the 500 consumers surveyed believe that F&I products are just ways for the dealer to make more money. Additionally, 48% said that they would never buy anything other than the car from a dealership.
However, further results from the study indicate that the resistance felt in the F&I office is not about the products themselves, but about the experience. This is supported by the fact that consumers realize that F&I products may be beneficial: Eighty-four percent say they believe that F&I products may have real value, and 66% indicate that they think F&I products may save money in the long run.
“F&I is one of the biggest parts of the buying process that has still not moved into the digital age, and dealers have been hesitant to evolve this process because it’s a major profit center,” said Mike Burgiss, founder and vice president of MakeMyDeal. “However, our study shows that the current F&I process breeds consumer skepticism. By changing when and how the shopper is introduced to F&I products, dealers could see a dramatic change in consumers’ likelihood to buy F&I products.”
Consumers’ desire to sign on the line and run is problematic, as the study showed that there is a gap in their understanding of the offerings. One third of respondents say they find the list of F&I product choices confusing. And 54% say they prefer to simply complete their purchase and leave the dealership as quickly as possible.
Even among consumers who said they were familiar with key product offerings, a significant portion could not correctly identify them. For example, 46% of respondents who claimed to be familiar with the vehicle service contract did not select the correct definition. Similarly, 56% of those who claimed familiarity could not identify the correct definition for prepaid planned maintenance.
Currently, most consumers are first exposed to F&I offerings after the vehicle price and trade-in have been negotiated at the dealership, but the study shows that consumers would prefer to learn about F&I products beforehand— on their own time. Over eight in 10 of study participants (83%) say they are interested in learning about F&I products before entering the dealership.
Once a consumer has a better understanding of the offerings, they are more open to hearing about them from the F&I manager, even among the most skeptical shoppers. Three fourths (75%) of all respondents (and 69%of those who are skeptical of F&I) report being interested in learning more about them from the dealership after they had a better understanding of what they were. Most strikingly, 63% of consumers state they would be more likely to buy F&I products if they could learn about them on their own time, before finalizing their vehicle purchase.
“When F&I product information and pricing is brought online, the dealer not only provides an exceptional buying experience, but they also help more shoppers realize the value these products provide,” Burgiss said. “And since consumers are more likely to buy F&I products and services when they learn about them earlier in the vehicle purchasing process, dealerships have a huge opportunity to grow their bottom lines while providing an experience that consumers desire.”
Originally posted on F&I and Showroom
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