Which offerings will remain popular?

Which finance and insurance products will dealerships be selling in five years? Experts say it's simple: The best-selling F&I products -- the ones that also are consistently profitable for dealerships -- have been and will be those that provide the most value to consumers.

"It gets down to what is going to help the consumer manage their cost of ownership over the long haul," said Forrest Heathcott, president of JM&A Group, an automotive finance company in Deerfield Beach, Fla. "Those that offer great value are still selling strong because that's what the consumer wants. If the consumer doesn't see value in a product, they are not buying it."

And customers are buying, according to the 2015 J.D. Power and Associates Sales Satisfaction Index Study released in November. Roughly one-third of the customers in the study bought F&I products with their new-vehicle purchase. Extended warranties, more properly known as extended service contracts, were the most commonly offered -- and most commonly purchased -- product, the study found.

Becky Chernek, founder of Cher-nek Consulting in Cumming, Ga., and a former dealership F&I manager, said extended service contracts are generally wise choices for consumers with nonprime and subprime credit who buy used vehicles. Many of those customers are on tight budgets and if their vehicle breaks down "maybe they're going to repair the car and not make the car payment," she said.

She also cautioned against overcharging for products.

"We have these wonderful products, but if you abuse the customer, they're no longer good products, right?" Chernek said. Then "it's a good product with a bad reputation."

Larry Dorfman, CEO of EasyCare, an F&I product provider and training company in Norcross, Ga., said products that are the same should be priced the same to all consumers.

"It shouldn't be that one person pays $595 for GAP [guaranteed asset protection] and another person pays $995 for the exact same GAP on the same car," Dorfman said. "Dealers should charge the same price. If it's a higher price, it's OK to make money on it, but fix the price. You lose credibility and trust of the customer when you negotiate the price."

It boils down to this, say experts: Customers who are happy with the value of their F&I purchases are more likely to return to the dealership to buy more vehicles and service.

So which products offer and will continue to offer value in consumers' eyes? Here are some F&I products that will enjoy continued longevity, according to several experts.

• WHAT IT DOES: Covers the costs of specific vehicle repairs for a specific length of time after the new-car warranty expires. Typically covers a vehicle's mechanical components such as engine and transmission. Contracts that also cover factory-installed consumer electronics such as Bluetooth phone connectivity and radio and navigation systems controlled by touch screen and voice command build more value.
• WHAT THE EXPERTS SAY:"That's our bread and butter," said Arzu Algan, dean of education at Automotive Dealership Institute in Scottsdale, Ariz., which teaches F&I sales techniques. Said Chernek: "It's a win-win for the customer and obviously there is a profit center there for the dealer. It's a valuable product and I don't see it going away anytime soon."

  Heathcott said consumers love that their factory-installed electronics are covered. "It helps them manage their costs over the ownership cycle of the vehicle," he said. "Once they get [those electronics], they don't want to do without them."

• WHAT IT DOES:Covers regularly scheduled maintenance, such as oil changes and tire rotations, as outlined in a vehicle owner's manual for a specific length of time.
• WHAT THE EXPERTS SAY: This product is mostly designed to help with customer retention, Chernek said. "It will never be a major profit for the F&I department -- it just isn't," she added. "It's pretty much not a value for the customer if you overprice it because they can simply go elsewhere and obtain their maintenance at a better price." Algan pointed out that prepaid maintenance is popular with lease customers because of its convenience.

• WHAT IT DOES:Covers the difference between the cash value of a vehicle and the outstanding balance on the loan or lease, in the event a vehicle is totaled or stolen.
• WHAT THE EXPERTS SAY:"I remember when it was first introduced, people were abusing the product and charging way too much for it," Chernek said. "They took the product away, regulated the pricing of it and brought it back because it's a good product." Added Heathcott: "It takes care of consumers when they need it the most."

• WHAT IT DOES:Replaces or repairs tires and wheels damaged by road hazards such as potholes, glass and other debris.
• WHAT THE EXPERTS SAY: "With infrastructure and road conditions in this country, [tire-and-wheel protection plans] have increased in value to the consumer," said Heathcott. "The cost has gone up because of the utilization of it. A lot more aluminum cast wheels get scratched and consumers want them replaced and there are tire lacerations. Consumers don't want surprises in their vehicle ownership."

• WHAT IT DOES:Pays for lost or damaged keys, or for those that need to be reprogrammed.
• WHAT THE EXPERTS SAY:Key replacement is growing in popularity because the technology embedded into them allows for popular features such as keyless vehicle entry and remote start. "It's ridiculous to try and replace some of these keys," Chernek said. "[Keys for] high-line vehicles? That's $500."

  Dorfman said key replacement offers "huge" customer value. "I know two kinds of people," he said. "Those that have lost a key and those that will." Added Heathcott: "It's gaining ground. If people ever have to replace one key, they will buy [key replacement] next time."

• WHAT IT DOES:A vehicle's exterior is treated with a sealant that protects its paint from dulling as a result of sunshine, road salt, tree sap or other damaging elements. The upholstery likewise is treated to resist stains from dirt, spills and other mishaps.
• WHAT THE EXPERTS SAY:This coverage keeps a vehicle looking good and enhances its resale value. "People don't want to replace their seats and they want their cars to shine," Heathcott said. "They like that extra coverage, especially families."

  Vince Santivasi, vice president of business development for finance and insurance at insurer Zurich North America in Schaumburg, Ill., said people are concerned about the appearance of their vehicles, whether they leased their vehicle, financed it or paid cash. "This has taken off over the last five or six years, and I don't see it going away," Santivasi said. "You can sell this on any type of transaction."

• WHAT IT DOES:For consumers who are leasing their vehicles, covers everyday mishaps such as dents, dings, cracked windshields and rips and cigarette burns in the upholstery.
• WHAT THE EXPERTS SAY:This product is popular, said Santivasi, because "customers don't want to have a bill because there is some type of ding or something the leasing company is going to charge them back for."

  Dorfman said it's a great product, but wishes it would be sold as a benefit to consumers while they are driving their leased vehicles, rather than only when they are about to turn in the vehicles at lease-end. "Fabric stains and scratches in the paint -- there are benefit packages that we and others offer that can be taken advantage of while you are driving the car," he said. "If you get them fixed, they're not there at the end anyway but you also get to enjoy the vehicle. The whole point is to enjoy the ownership experience."