The dealer, F&I vendor disconnect

Jim Henry is a special correspondent for Automotive News

There’s a disconnect in the F&I space that’s getting more obvious.

Many dealers, including some of the big publicly traded dealership groups, say they’re limiting their F&I menus to three or four items: extended-service contracts, GAP policies, prepaid maintenance and perhaps another.

The disconnect is that as a whole, F&I vendors are trying to push twice as many products or more.

Since everyone seems to agree that customers want a faster, more-efficient transaction, something’s got to give.

Dealers keep the familiar workhorse products on the menu not only because they are the biggest-ticket items but also because they have obvious continuing benefits: Service contracts and prepaid maintenance drive repeat business in the service lanes.

At the NADA expo last weekend in Orlando, a longtime dealer acquaintance told me he got so tired of people trying to sell him something, he turned over the name badge that identified him as a dealer. That wasn’t only to thwart F&I vendors, but still.

After he said that, I noticed a lot of dealer principals at the trade show with flipped-over badges, either accidentally or on purpose. In a way, it’s a nice problem for dealers to have if there are more F&I products chasing fewer spots on the menu.

Meanwhile, lots of vendors are working on high-tech electronic menus. Part of the reason is that an e-menu enables a dealership to “stock” more F&I products because it’s easy to tailor the menu quickly to fit a particular buyer profile -- loan or lease, for instance. Bundled products help, too.

But it looks like some store execs are already turning over their name badges.

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