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Unleashing the Benefits: Online F&I Empowers Auto Dealers and Consumers

By, Aqsa
  • 28 Aug, 2023
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The digital age has revolutionized car buying. According to a study, more than half of the vehicle shopping process, 61% to be exact, now takes place online. Despite the shift to digital, two aspects of the car-buying journey remain frustratingly unchanged: price negotiation and paperwork. These factors continue to be major pain points for consumers when finalizing their purchase or lease.

Interestingly, dealers have overlooked a key element that could address these complaints: finance and insurance (F&I). F&I plays a crucial role in the car-buying process, determining payment plans, protections, and services that can last for years. However, this stage often proves to be time-consuming and exasperating for buyers, particularly after a long day of haggling over terms and prices. In reality, these negotiations could easily be conducted online in advance, reducing stress and saving time.

This study revealed that bringing F&I online significantly cuts down on paperwork. Negotiating and completing paperwork digitally have the most substantial impact on reducing a customer’s time spent at the dealership, saving an average of 45 minutes. Many dealers still cling to outdated practices, insisting on conducting this part of the process solely at their physical storefronts. By doing so, they miss out on a golden opportunity to streamline the process, enhance customer experiences, and increase profits.

To successfully incorporate F&I into their digital storefronts, dealers should consider the following:

Firstly, dealers should provide monthly payment calculations for lease and buying options on specific vehicles. This customization is crucial for shoppers who want to understand how incentives, taxes, and fees will be applied to their payments.

In addition to personalization, this detailed payment and pricing information ensures transparency for consumers. Clear terms eliminate any potential conflicts that may arise during negotiations, thereby improving the customer-dealer relationship.

Secondly, customers should have the option to apply for credit and financing online. Currently, only 16% of car buyers secure credit and financing online, presenting a significant opportunity for dealers to enhance the process.

Finalizing credit and financing terms prior to arriving at the dealership alleviates stress for both parties. With credit checks completed and financing in place, dealers and consumers can focus on more enjoyable aspects of car shopping, such as test driving vehicles and customizing settings.

Thirdly, F&I is a valuable tool for dealers to maximize profits. By promoting aftermarket services and products such as pre-paid maintenance plans, extended service contracts, and accessories, dealers can generate consumer interest in F&I offerings.

This approach also allows consumers to understand how these additional purchases would impact their monthly payments and appreciate the benefits of these products. Instead of feeling pressured to make hasty decisions, consumers can make informed aftermarket purchases with confidence.

Lastly, integrating a trade-in valuation tool can boost consumer confidence and eliminate a common source of contention during negotiations. Trade-evaluator tools, like Kelley Blue Book’s, give buyers a sense of control by providing a validated trade-in value from a trusted third-party. This ensures that consumers receive a fair trade-in price and removes uncertainty from the process.

Given that trade-in value often serves as the most variable component in a deal, preparing shoppers with realistic values before visiting the dealership removes a significant area of potential conflict.

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