Legacy F&I products dropping off dealer menus

Time-traveling auto buyers from the late 1970s and early 1980s likely would be stun-ned by the changes at car dealerships.

For starters, they'd be puzzled by the tablets, computers and other technologies used to sell vehicles. Then they'd marvel at the seismic changes to the vehicles themselves, not to mention the demise of brands such as Eagle, Mercury, Oldsmobile and Pontiac.

But those customers also would be struck that dealerships may not offer some well-known finance and insurance add-ons as vehicle production, materials and technology have advanced and customer demand has shifted.

Here's a look at four once-popular F&I products that are fading from dealership menus.

Anyone who lives in states that receive significant snowfall each year can attest to the large amount of salt spread onto roads during winter. That salt can save lives by preventing crashes that result from the ice and snow, but it also can lead to corrosion -- lots of it.

Three decades ago, dealers capitalized on that, as noted in a 1982 Automotive News article, "Dealers positioned right for rustproofing." According to the report, rustproofing promised to become "a money maker for the dealers who merchandise it properly."

And many savvy F&I folks at the time, including George Angus, now president of F&I consulting firm Team One Group in Scottsdale, Ariz., took advantage. "We sold a lot of rustproofing in what we call the Rust Belt in those days," he said, adding that it was an "automatic" customer buy for years.

Until, that is, automakers began to change their materials and protocols. "New high-tech factory anti-corrosion methods have beefed up vehicle sheet metal's strength against rust's brown bite,"Automotive Newsnoted in a 1990 article. "It has also prompted carmakers to ask dealers to refrain from applying rustproofing."

Rustproofing was a $1.4 billion industry in 1985 as 7 million cars were rustproofed that year, according to the article. By 1990, business had been cut in half as technology advanced.

While many consumers don't think they need rustproofing anymore, it can still be a smart buy for certain drivers and an easy sell for F&I staffers in colder climates, Angus said.

But the days of rustproofing being that automatic buy are long gone.

It's a simple product with a simple goal: deterring theft. Etching the vehicle identification number into the window can make a thief think twice because the vehicle can be easily proved stolen, said Dave Duncan, president of Safe-Guard Products International, an F&I product provider in Atlanta. And etch has sold well at dealerships throughout the country, he said.

But the product's popularity has waned because of questions over its cost-effectiveness for consumers.

Angus said "better" dealers sell VIN window etch for $149 to $199. But a few "rogue F&I agents," according to Duncan, charge up to $300. "It's easy prey because it's a low-cost product," he said. "A bad actor can exploit a product like etch."

Still, price gouging on etch has become so notable thatConsumer Reportslisted etch as one of its "10 common car-buying mistakes" in 2012. "If you decide you want VIN etching, you can buy a kit to do it yourself" for $25, Consumer Reports told readers.

When Angus joined the auto retail business in 1975, credit life, accident and health coverage "were all we had" outside of service contracts, he said. "Up until the '90s, GAP [guaranteed asset protection] wasn't sold yet," he said.

Credit life and credit disability, which cover the remaining balance of a loan if a customer dies or is disabled, weren't very expensive, Angus said, making for "a fairly easy sell." Their decline in market penetration can be traced to state regulations becoming stricter, he said. Some states, such as Texas, still provide dealers a profitable sales climate for credit life and credit disability, he said. But in many states, California especially, the premium dealers can make off the product has been driven downward.

"Some states priced it out to the point where it makes no sense to offer it," he said. "States took the profit out of it for the dealer, so it started to decline."

Hannah Lutz contributed to this report.