Better F&I experiences start with expanded financial literacy

Providing consumers basic financial literacy may be the first step in improving their F&I experience.

Over the past few years, dealerships and vendors seem to be especially focused on the customer experience, which includes giving customers F&I information upfront. Based on finance knowledge deficits relayed by some customers, F&I education seems to be an appropriate area to expand.

Nearly three in five customers who have applied for at least one auto loan said they didn't understand the relationship between a loan term and interest, according to a survey by Instamotor, a used-vehicle shopping website.

More than 40 percent of those surveyed didn't know what it meant to be "upside down" or "underwater" on a loan. And more than 60 percent did not know what guaranteed asset protection was. Younger consumers in particular could benefit from financial education. Less than a third of millennials said they understood the factors lenders evaluate them on when they apply for an auto loan. Less than half of millennials surveyed understood how to evaluate the quality of a loan offer.

The F&I department is a profit center for the dealership, and it's increasingly important as new-vehicle margins tighten. But it should be a service center, too.

Many dealerships now feature F&I product videos and self-service financing tools on their websites so that customers have a basic understanding of F&I when they arrive at the dealership.

When customers think of a dealership's finance department as a resource, rather than a challenge, they will be better informed, and dealerships will likely become more profitable.

Dealerships and their venders are on the right track.

You can reach Hannah Lutz at



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