Home deliveries? Make sure to tweak F&I pitch
|Jamie LaReau covers auto dealers for Automotive News|
Edmunds.com is exposing a secret in the auto business: Most dealerships will deliver a vehicle to a customer's home or office.
Edmunds.com urges consumers to request deliveries once they've negotiated a car purchase. The customer is spared hours of waiting at a dealership for paperwork -- and the customer escapes the dealer's hard sell of additional products and services in the finance and insurance office, Edmunds.com says.
The first benefit is a win-win for customers and dealers. A customer pleased with a delivery means higher customer satisfaction scores. It could lead to more sales from word-of-mouth goodwill.
The second perceived consumer benefit, however, may not be.
Sure, the sale of products such as extended-service contracts, wheel-and-tire protection and paint-and-fabric protection are profit generators. But many customers find value in them. Those products also often prompt customers to return for service. With ever-shrinking profit margins on vehicle sales, sales on the back end are critical.
If a dealer can't get a customer into the F&I office to pitch those products, revenue could nosedive.
Edmunds.com is sympathetic to dealers, says Philip Reed, senior consumer advice editor at Edmunds.com in Santa Monica, Calif. But Edmunds.com is a consumer advocate, he says. Reed's role is to protect consumers who are often in a state of euphoria when buying a new car and might buy F&I products "they just don't need," Reed says.
Consumers are increasingly buying vehicles off dealership Web sites and negotiating a deal over the phone, Reed says. So the request for home or office deliveries likely will rise.
That means dealers will need ways to pitch F&I in someone's living room instead of the dealership.
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