Where F&I products fit in the future of subscription services may be too soon to predict, but programs such as Ford's Canvas say business runs just fine without them. Could the absence of F&I with subscription services put F&I product sales at risk?
Most subscription services remain in pilot stages, but for those operating today, the F&I office is left out of the experience.
Included in the monthly fee of a Canvas subscription -- currently operating in San Francisco and Los Angeles -- is any and all things a customer needs to hit the road besides fuel, according to CEO Ned Ryan. Starting at $400 per month, subscribers get the car, miles, maintenance coverage, the manufacturer's warranty and full-coverage auto insurance. Because Canvas is exclusively online, as of now, dealerships play a role when it comes to the maintenance of these vehicles but miss out on F&I product penetration.
Ryan told Automotive News that at this time, there is not an opportunity to select additional F&I products.
"We think the bundle is perfectly sufficient, and I think our customers value the simplicity and ease of the experience," he said.
Part of the appeal for consumers comes from skipping the conversation entirely -- no one pitching paint protection or dent repair. Dealerships that sell vehicles to Canvas are making profit on the front end but missing some opportunities on the back end.
Down the road, however, that could change. Ryan said that depending on consumer demand, F&I may enter the subscription landscape.
"I can't say never for additional F&I," he said. "Further innovation with dealers would be exciting for us."
It's probably too soon to say whether F&I product sales will truly be at risk as subscription services expand. Product providers wary of F&I flatlining in the wake of such services should be thinking about how quickly the landscape needs to catch up to piloting business models.