F&I and The Emergence of the Digital Dealership

Over the years I’ve had the opportunity to help numerous sales and service departments evolve to meet the needs of today’s digital shopper. While few have been bold enough to launch a completely digital sales process, it’s certainly on their radar as most of them realize they will have to change in order to survive.

So why isn’t F&I evolving?

Want to make enemies in an F&I department, just try to change something. As a matter of fact, the mere mention of changing the F&I process to provide a better consumer experience is met with resistance the likes of which has not been seen since Kodak chose to ignore digital photography.

At one time a “Kodak moment” defined a sentimental, charming or interesting point in time, worth capturing in a photograph. Today a Kodak moment describes businesses that fail to adapt to changes in their industry and fall from a dominant position into bankruptcy. The irony for Kodak is they invented the digital camera in 1975, but chose not to pursue it for fear of cannibalizing their film business. Kodak was right. Digital photography would kill film and their refusal to change allowed their competitors to crush them by providing user-friendly digital solutions.

The future of F&I

Business managers love to trumpet the fact that their departments are, on a per-square-foot basis, the most profitable in the dealership. NADA substantiated this in 2014 when they reported that while F&I only represent 3.6% of the average dealerships revenue, it generates 22.9% of their profit. No dealership can afford to lose this profit centre and since many F&I managers refuse to change, they are forced to drag customers kicking and screaming through an out-dated process.

Consumers want change and if you don’t deliver, someone else will

  • 99% of people expect a hassle while at a car dealership.

Driving Sales 2015

  • 84% want to spend less time in dealerships and would prefer a more transactional experience online.

Source: Trust Factor Study About.com

  • 87% want the buying process to be more transparent.

Source: CDK Global

  • 71% would prefer to do F&I research at home before they purchase.

Source: MakeMyDeal

  • No T/O rates are surging as consumers drive greater distances to visit fewer dealerships.

Source: Digital Road to a Sale Dealer survey 2015

Digital Disruption: Be the disruptor or be disrupted

Carvana, Vroom, GoGoCar and OMS Direct listened to the negative feedback and responded with customer-centric digital sales models that trumpet the fact that you no longer have to visit a dealership or an F&I department to buy a car. These companies are giving people choices that are disrupting the traditional sales model and forcing conventional dealerships to adapt to in order to remain competitive. Will a disruptor force your dealership to respond by building a new sales model and eliminate your F&I department? Or will you take control and disrupt your old model to develop a superior one?

Omni-Channel F&I is the solution

Imagine a customer centric F&I process that increases profitability by offering transparency, eliminating No T/O’s and shortening the time customers spend in dealerships. Omni-Channel F&I does just that by delivering equally effective presentations across all channels of communication (i.e., in person, on the phone, via text, email, video or by screen sharing).

Digital menus go mobile

Omni-Channel F&I only requires a digital menu and a willingness of F&I managers to go mobile. Once they do, their presentations can be delivered anytime, anywhere and be viewed on any device. They can share videos, seamlessly link to websites and document share. They can change amortizations, interest rates and down payments on the fly. Omni-Channel F&I is completely transparent, engaging and needs-based. Plus, all presentations can be delivered to customers while they’re in the comfort of their home, office or anywhere. Properly applied it will change the perception of the F&I process, lower resistance, increase sales and profitability.

Trust + Transparency + Saving Time = Sales

Consumers use three key factors when determining where to buy their next car: Trust, transparency and a respect for their time. Omni-Channel F&I delivers all three. Leaders must think less about improving their F&I process and more about reinventing it. Omni-Channel F&I is the simplest and most effective way to avoid being caught in next Kodak moment.

Jim De Luca

Vice President

Digital Road to a Sale Inc.

905 865 8734







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