How to deliver a superior experience and enhance profitability.

For many dealers, the F&I process can prove to be both a rewarding and challenging experience. Get it right and the result is a happy customer and a good source of revenue for the dealer. Get it wrong and you end up with a dissatisfied purchaser, money left on the table and the potential for greater problems related to CSI and long-term retention/reputation.

Traditionally, the way many dealers approached F&I was by menu selling—providing a list of products to consumers in the business office and then determining which one best fit their needs. The trouble was that it took a long time to explain all these products and today most consumers have neither the time nor the inclination to sit through a lengthy presentation on F&I products and services.

Different approach

Furthermore, when the COVID-19 pandemic descended upon us in 2020, the whole vehicle sales process was turned on its ear. In many cases, face-to-face contact between dealer customers and sales staff/F&I managers was no longer possible, meaning that if dealers wanted to sell vehicles and provide their customers with the right F&I products—a different approach was needed. As a result, we saw the proliferation of online training and solutions, including platforms such as the Centre of Excellence training program from iA Dealer Services and the Daveplus dealer portal solution available through Sym-Tech Dealer Services, which delivers the same F&I experience for the customer whether in-person at the store, or remotely via smartphone or tablet.

While digital and virtual tools have vastly improved over the last decade, how successful F&I is for both the dealer and customer comes down to one thing—transparency.

“A better experience always centres around the customer with full transparency,” explains Derek Sloan, President of Sym-Tech Dealer Services. “Customers will buy more than we can sell them if they are made comfortable, their needs are assessed up-front, and, all the relevant products are presented in a non-pressured manner.”

By doing so, notes Sloan, the customer is often far more amenable to logical and value-addedrecommendations.”

Working with reputable partners

At iA Dealer Services, Danielle Campbell, Regional Sales Vice President, West, Ontario, Atlantic Region, explains that another critical element of success in the F&I space for dealers is working with reputable insurance partners. She explains that iA Dealer Services “has the unique advantage of administering and adjudicating all F&I products.” This provides customers with end-to-end control of the F&I process—giving them an unparalleled ownership experience that will enable dealers to not only boost their CSI scores but increase long-term customer retention and loyalty.

Jake Stacey, Executive Vice President, Sales & Training at LGM Financial Services, says that besides transparency and customer control, how that client is transferred from the salesperson to the F&I manager is also key to delivering a superior experience and it’s something that’s frequently overlooked. “A proper turnover needs to create a seamless experience for the customer, build trust and rapport with both the salesperson and the Financial Services Manager, and give them peace of mind about their purchase,” she says. This is why it is critical for the salesperson to set the right expectations about the F&I experience from the outset—ensuring the customer is able to head to the business office knowing what to expect and feeling confident that they are in good hands.

It’s a process that’s proven to be highly effective, time and again. Stacey notes that in LGM’s case, only one month after an LGM Dealer Development Manager implemented a customized turnover process at one of its partner dealerships, the percentage of used vehicle customers that met with a Financial Services Manager increased from 40% to 100% and from 80% to 100% for new vehicles.

Opportune time

In today’s economic climate, where consumers are facing higher living costs, driven by inflation and interest rates—plus ongoing supply issues and pricing related to both new and used vehicles, there’s arguably never been a more opportune time for dealers to really demonstrate the benefits of quality F&I solutions—particularly with fewer OEM incentives, higher financing rates andoften longer loan amortizations—up to 84 and even 96 months in some cases.

Derek Sloan notes that with these longer terms, products such as Mechanical Breakdown Protection, GAP/Debt Waiver, Appearance and Corrosion protection are all becoming far more relevant and desirable for consumers—both for vehicles that are financed and leased.

“While we’ve seen some OEM countering the longer-term financing trend with more aggressive leasing deals, lease terms overall are skewing longer—upwards of 60 months in some cases,” he says. “For the lease customer, MBP, AP and Excess Wear & Tear become more important with these longer lease terms.

Loan protection

At LGM Financial Services, Jake Stacey notes that another product that becomes particularly important during uncertain economic times is loan protection. “This makes owning the vehiclemore affordable during unfortunate, but surprisingly frequent, life events, such as losing a job or becoming disabled and not being able to achieve their typical income. It also protects their family members from taking on a substantial vehicle debt in the event that the car owner becomes critically ill or passes away.”

In summarizing, elevating the modern F&I experience for customers boils down to understanding the customer’s needs, preparing them for the experience and presenting them with the products and solutions that fit their requirements in a transparent and efficient manner—delivered to them through communication channels that are most suited to them.