Incorporating F&I products and processes is the last bastion for dealers before they can truly sell a car online, according to F&I experts, dealers, trainers and F&I product providers.
Nearly 3 in 4 customers prefer to get deal-specific information online, including F&I products, according to Cox Automotive's 2018 Future of Digital Retail study. About half of the 2,550 in-market shopper respondents said they wanted to structure the deal online themselves.
Customer demand that affects digital retailing varies by market, says Mo Zahabi, senior director of product consulting for Cox, which offers online retailing software. Part of what's influencing demand is simply the awareness that digital F&I product purchases are even possible.
"It's up to the dealer to really drive the concept of digital retailing," Zahabi said. "Not every dealer does a really good job advertising the fact that that's an option at the dealership."
F&I product information belongs inside the dealer's digital retailing process, he said, and should allow customers to go as far as they want to in the car-buying journey.
But what's really slowing the progress of digital F&I product presentations, consultants said, is profitability.
F&I profits account for a hefty portion of dealerships' gross profits. F&I makes up about 4 percent of revenue at the nation's top public retailers but accounts for roughly 30 percent of their gross profits. AutoNation Inc., the No.1 public retailer for F&I profit per vehicle, pegs $1,350 of its nearly $2,000 per-car F&I profits on product sales.
"There's going to be a natural resistance," Pryor said. "If you go to a dealer and you say, 'Hey, look, we've got this great solution, but the profitability is only half of what you had before' — that's really going to slow down the adoption."