As more customers shop for vehicles online, will they also shop for finance and insurance products? Or is a credit application just another pop-up to click off?
Some in the industry think the Internet will hamper the F&I business, but not auto retail veteran and Internet consultant Ralph Paglia of Gilbert, Ariz.
Paglia, who has a background in both technology and F&I, told Staff Reporter Donna Harris the Internet is the best venue for selling F&I products.
Q: Why don't we see more dealers selling F&I on the Web?
A: Most Web site providers have the ability to put presentations for aftermarket products online, but the dealer has to set it up. It's a challenge for the dealer. Someone has to put in hours of work to set it up. I believe there's a niche out there for someone to fine-tune dealers' Web sites for finance.
Why do you think consumers are open to buying F&I products online?
At most dealerships, finance managers are already presenting products on a menu displayed on a computer monitor. Some dealers hand customers a paper menu or a desk mat, but most use a computer monitor. It's easier to modify. If menu selling works, then using the Web to sell F&I products will work.
The Web also is more conducive to shopping for finance and insurance products. Customers like to take their time and absorb information, and they can do it online.
But don't these products need a champion, a finance manager to sell them?
If the customer sees the menu online and then on the salesperson's desk and then again in the F&I office they are more likely to trust the prices quoted and feel comfortable with products being offered. Familiarity breeds trust. That's why advertising works.
And if the customer is familiar with the products, the finance manager can just offer to answer questions.
So marketing products on the Web can save time?
The time it takes to present F&I can kill customer satisfaction scores. Putting the menu online can save time in the F&I office.
Can you offer some tips for selling F&I online?
People like seeing tables and charts that allow them to figure out what they want -- the value point that's right for them. If they're going to keep the car three years they might look at a chart to find out what a three-year warranty would cost.
Some finance managers and consultants say that consumers won't buy finance and insurance products online.
That's false. It is not that there is a resistance on the part of consumers to buy over the Internet. Most certified pre-owned vehicles come with an extended service contract as part of the certification process. I help a lot of dealers market certified pre-owned vehicles using the Internet, and it's very successful.
I also did a study for a major dealership group on Internet leads and close rates. Of the customers who closed within 30 days, the vast majority of the communications dealt with F&I. They wanted to know about warranties, extended warranties, financing, interest rates.
What about Generation Y? Are they interested in buying products?
Baby boomers can write a check and buy a car. They're not as interested in extended warranties and financing. For the younger person financing has more value and they are more inclined to buy an extended warranty. There's a lot that can be done on the Web to educate Generation Y or on mobile devices to predispose them to buy.
How can the Web be used to predispose them to buy F&I products?
If the menu is online, when they do get to the dealership and they are in the finance manager's office, the menu will be something they already have seen on their phone or personal computer or iPad. They are going to be a lot more comfortable making decisions to buy.
Some people still insist customers need to be coached by a finance manager.
Some will make those decisions without the finance manager present. We saw that with online service scheduling. The average repair order is always higher when they self-serve. They just check off what they want.
We're not at the point where we can say F&I products are dead because people want to buy cars on the Internet. I am not going to give that up. It's evolving as we speak.
People buy retirement annuities online. They do online banking. We have to give customers access to financial and insurance products online in a manner that they see value. If we don't, we'll be left with a few people in the finance office.