Why it's time to put F&I online

by Jim Henry
Automotive News, June 25, 2014

It’s common practice at many dealerships to keep F&I products under wraps until customers are in the last stages of a car purchase. But is it wise?

Executives from auto shopping sites AutoTrader.com and Edmunds.com say no.


“There is a real opportunity to differentiate yourself by not withholding it until the customer gets to the F&I office. People are increasingly dissatisfied by it,” Kevin Filan, vice president of customer marketing and industry relations at AutoTrader.com, said last week during an Automotive News webinar, “Third-Party Sites and Online F&I.”

Instead, Filan said, dealerships should be ready to discuss the F&I process and pitch the value of F&I products -- including pricing -- before the customer sets foot in the store.

For many F&I trainers, that’s a no-no. They insist that even after customers arrive at the dealership, salespeople should barely mention F&I products and never discuss pricing. The thinking is that mentioning F&I products too soon causes customers to get defensive.

But Filan said that philosophy is out of step with other online retail experiences. “You can buy an airline ticket, make a reservation at a restaurant or compare mortgage terms for a real estate transaction [online]. Consumer expectations are evolving and changing,” he said.

So does that mean you should present service contracts online? “In the medium to long term, the answer is going to be yes,” Seth Berkowitz, president of Edmunds.com Inc., said during the webinar.

Berkowitz said an unintended consequence of making vehicle pricing widely available online is that customers tend to anchor themselves to a specific monthly payment and refuse to budge, making it difficult to add even a small amount for F&I products.
That’s especially true for lease customers -- a growing factor with the rise in leasing, he said.

“That anchoring makes that negotiating a little harder,” Berkowitz said, and it’s all the more reason to introduce F&I products online. “Show people those options upfront,” he advised, “before they lock in what those payments will be.”

For a free replay of the webinar “Third-Party Sites and Online F&I,” go to autonew.com/accessfijune2014.