Protective Asset Protection unveiled additional trends and insights stemming from its recently released second annual report on automotive F&I Product Trends and Outlook, with an emphasis on the impact digital retail has had on F&I product sales to car shoppers.
Particularly for younger car shoppers, digital retailing has increasingly grown in popularity. According to McKinsey, less than a third of younger consumers today want to shop for their next car in-person at the dealership, and a larger number of these individuals are interested in contactless service as well.
While many F&I options can be beneficial to a car buyer, such as vehicle service contracts and ancillary protection, the customer perceives these as “upsells” at the last minute inside the F&I office. Despite the feeling of a possible upsell, many consumers see the true value and benefit these products offer when they are given more time earlier in the research phase to understand how they can benefit their vehicle purchase, McKinsey’s research found.
Digital tools dealerships used to offer customers when buying a car pre-pandemic compared with today saw noticeable increases in a few obvious areas. For example, according to Protective’s recent report on F&I Product Trends, 19 percent of dealers said they offered at-home test drives prior to the pandemic, and this increased to 24 percent today. Furthermore, only 10 percent of dealers offered at-home delivery of the vehicle prior to the pandemic, compared with 17 percent of dealers today.
The report also shed light on specific F&I product growth areas. Vehicle service contracts and GAP coverage are primary F&I product offerings for customers looking to buy new and used cars and trucks. Pandemic or not, customers will always give significant consideration to these protection products for their vehicle.
Nearly half of dealers (44 percent) said emergency roadside services was a primary reason why their car shopper customers indicated an interest in selecting products such as a vehicle service contract. This was followed by new technology features now found in vehicles both new and used (40 percent); secondary mechanical components such as air conditioning (35 percent), which is most likely an indication of more used vehicles sold today; and electrical components (35 percent).
“As we head into the final months of 2021 it’s important for dealers and their F&I partners to have the proper visibility into consumer shopping trends and F&I product preferences,” said Rick Kurtz, senior vice president of distribution with Protective Asset Protection. “Digital retailing continues taking a significant step forward in automotive, and those dealers who fully embrace F&I product education, research and shopping options online early on in the process will truly gain their customers’ long-term trust.”
Click here to download the F&I Trends report.
