As auto retailing shifts toward allowing consumers to buy vehicles entirely online, it behooves dealerships to do more to market and promote finance and insurance products, F&I trainers and dealership managers agree.
That may mean giving the F&I department its own marketing budget. But above all, F&I pros say, it means educating consumers, before they arrive at the dealership, about why they need those products. Doing so adds transparency and creates consumer interest, which makes car shoppers more apt to want and buy F&I products.
To do so, F&I trainer Ron Reahard, president of Reahard & Associates in Soddy Daisy, Tenn., created videos that explain what the products are, what mishaps and problems they cover and the peace of mind they offer. Each is narrated by an expert, giving the videos them the voice of authority.
For example, who better than an ASE-certified master technician to explain that today’s vehicles are virtually computers on wheels and when something goes awry, their complex, expensive components are typically replaced, not repaired?
In another video, a certified professional financial adviser lays out in detail why consumers should establish financial relationships with new lenders when making a secured purchase such as a vehicle.
“Selling is making people want what you have, and they may not even know they need this product,” said Reahard. “They may say, ‘That’s why I’m buying this Lexus — it’s not going to break.’ What they haven’t thought about is how much more technology there is in this car than their 12-year-old Buick.”
When they do think about the added tech in the vehicles, “That’s what makes the customer say, ‘Well, how much is that service contract?'” Reahard said. “As a finance manager in a dealership, that’s the best you can hope for — that when a customer comes in, they’re interested in your product.”
Paul McCarthy, senior vice president for agency and dealer sales at AUL Corp. in Napa, Calif., describes himself as a “big proponent” of F&I being a part of the marketing arm of dealerships, with marketing dollars spent specifically on F&I.
“Way too often when you go to a dealership’s website, you can find all the information that you want about new cars, used cars, special deals this weekend and why it’s the best time ever to buy a car,” McCarthy said. “But when we go the F&I section, it’s limited information. You can choose your own interest rate and loan term and calculate a payment, but beyond that, there’s not much information.”
McCarthy said it’s worth investing time and money to help consumers understand the products and their benefits because many shoppers will research F&I products online prior to visiting the dealership.
Dealerships, he said, “should be controlling that information and not letting it come from sources that have negative things to say or things that mitigate the sale of these valuable products in F&I.”
About two years ago, Knoepfler Chevrolet switched from selling F&I products to “educating our customers about what their concerns could be down the road and what their options are, whether it’s GAP or service contracts,” said Joe Knoepfler, the dealership’s part owner and director of operations. That’s also when the Sioux City, Iowa, dealership tapped Reahard’s company to provide regular training for its F&I department.
Now, a half dozen of Reahard’s videos reside on kchev.com under its financing tab. The videos, each less than two minutes long, take a consultative slant as they tackle topics such as vehicle appearance protection and guaranteed asset protection, or GAP insurance.
In one video, an ASE-certified master technician works in a service department while explaining — among other things — that having a vehicle’s maintenance performed at the dealership means each time the VIN is entered into the dealership’s computer, the dealership checks whether the vehicle is subject to recalls, service bulletins or software updates.
Since posting the videos on the site in February 2018, and with employee training, F&I sales per new vehicle retailed have doubled and F&I sales per used vehicle retailed have climbed almost 50 percent, Knoepfler said. The dealership typically retails about 140 to 180 vehicles per month, about evenly split between new and used, he said.
Many Knoepfler Chevrolet customers find the videos on their own, but the dealership also trains sales staff to use them as talking points and to direct consumers to them should F&I questions arise during the sales process. The videos are not used in the F&I office, Knoepfler said.
Though his store doesn’t have a separate marketing budget for the F&I department, Knoepfler said F&I product marketing is a line item in the sales department budget. F&I training is part of its training budget.
Those reallocated funds have been “beneficial to the growth of that department,” he said.
Rick Kurtz, senior vice president of distribution at Protective Asset Protection in Chesterfield, Mo., said vehicle shoppers have an “unquestionable thirst for knowledge and information — the product and the process — and certainly F&I is a component of that.”
Dealers should focus F&I marketing messages on channels important to consumers such as dealership websites, social media and “wherever the consumer is researching the potential transactions,” he said. But he recommended against including prices in F&I marketing because products have variations and options.
“Think about tire-and-wheel products,” he said. “That may depend on what part of the country you’re in, how much you’re driving and what kind of coverage you want. That same basic assumption is applicable for almost every F&I product. So to put pricing out there — it could be confusing.”
Paragon Honda and Paragon Acura, both in Woodside, N.Y, tout express checkout on their websites under their “buy from home” banners. Though express checkout is targeted to consumers who want to complete the entire purchase process online, its information is there for anyone who chooses to click through.
Along with posted vehicle prices and calculators to estimate trade-in values and monthly finance and lease payments, each dealership has a page devoted to service protection plans such as service contracts, key replacement and prepaid maintenance — with individual products’ prices and monthly payments.
Brian Benstock, vice president of both dealerships, said customers have a right to accept the prices, try to negotiate better prices or reject the prices and products altogether.
“When I go to Amazon to buy something, they tend to tell me how much it’s going to cost,” he said. “Transparency is the only way to do business online. If people are educated and know what they’re getting, they’re able to make better decisions.”
F&I marketing is part of Paragon’s advertising budget for new and used vehicles, Benstock said. The stores sell about 10,500 Hondas and 3,500 Acuras annually, of which about 65 percent are new.