Industry experts predict the F&I office will change with the rise of new vehicle ownership models, such as subscription services. To prevent downsizing in the F&I department, product providers should look to other areas of the automotive industry to create products outside the usual F&I realm, such as telematics devices.
Subscription service company Flexdrive took cues from fleet companies by having their dealership partners uniformly install telematics devices in their subscription fleet to track the vehicles' usage.
Once a vehicle exits subscription circulation, the device could be sold as an F&I product, according to Flexdrive. That would not only give dealers an additional return on their investment, but it also would allow the F&I office to adapt to evolving vehicle technology.
The devices are a win for all parties, according to Drew Heckman, head of strategy for Flexdrive. Dealers, F&I managers and customers benefit from mobile access to a vehicle’s location, diagnostic information and select remote enablements.
Dealers can keep tabs on their vehicles, watching the mileage and depreciation of the models in circulation, and they can ground vehicles to repossess if customers are delinquent on payments. Customers can track their car’s location on their phones and utilize remote-start and climate-control functions with the push of a button.
And the F&I manager isn’t left out of the equation.
“It gives dealers an option at the end of the subscription life,” Heckman said.
Companies such as EFG Cos., an F&I product provider, already are working to sell these devices as F&I products on an individual retail basis.
Consumer-facing apps are a big draw for customers in the F&I office. John Stephens, executive vice president of dealer services at EFG, said Driver's Advocate, the company’s onboard diagnostics telematics device, is being tested in dealerships.
Each device costs the dealer between $100-$150, a price dealers balked at until they realized they could mark up the product and charge an installation fee when selling it to customers, according to EFG.
The device also can improve customer loyalty programs. Customers can pair their devices with a mobile app that ties in with the dealership’s customer relationship management system. Because the device monitors mileage, customers receive service updates and special dealership offers through the app, which Stephens says will help retain service customers.
Whether it’s a telematics device or another product in the pipeline, F&I products should innovate alongside evolving technologies. The potential for F&I in future vehicle ownership models starts with flexibility and open-mindedness in the dealership.