F&I Tips & Trends
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F&I Tips & Trends

The key ingredient to maximizing F&I success is the power of the connection between the finance manager and the customer.

Paul McCarthy is the senior vice president, agency and dealer sales for AUL Corporation.

1. The future of F&I is very bright

With F&I comprising a growing percentage of automotive profits, the future of F&I continues to be very bright. The costs of new and used vehicles are at historic highs and consumers are increasingly looking for ways to protect their investment. In fact, dealers today should have a PVR between $1,500-$2,000 or greater. If not, it’s time to review your F&I strategy.

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2. Role of F&I technology

While new technologies have been a tremendous help in facilitating F&I transactions, especially during the pandemic lockdowns, technology itself is not a final solution. Technology’s biggest impact has been with the process, not the product. The key ingredient to maximizing F&I success is the power of the connection between the finance manager and the customer.

3. Where the future growth of F&I will come from

We see F&I growth opportunities coming from high-mileage used cars, hybrid and BEVs, and in the policies that cover the many technological systems found in modern cars. The electrification of the American automotive market is just beginning, and consumers are holding onto their cars longer than ever before, driving up the need for policies that cover vehicles that were previously uncoverable.


4. CPO programs will become increasingly important, even with switch to BEV

Even with the switch to BEVs, we believe CPO programs will become an important avenue for revenue growth. Seventy percent of claims are now non-powertrain components and consumers will need F&I products to cover the rest of the vehicle. And with the cost of parts increasing 30-60% in the last 12 months, coverage is ever more important.

5. Transparency is your key to success in F&I transactions

Studies have shown that the earlier F&I options are introduced to the buyer, whether via the website or during the sales process, the more likely they are to be purchased. We recommend dealers allow the customer to review all their F&I options from the outset of the relationship. The greater the transparency, the greater the results.


6. F&I will continue to be a driving force in dealer profits

Not only are F&I policies more popular than ever with consumers, chargebacks have seen decreases as much as 90% in the last 24 months. Today’s customer understands why they purchased their specific policies and are far less likely to cancel. And proper F&I disclosure creates a desire to purchase and maintain coverage.

7. F&I revenue sharing for dealers will continue to increase

While dealers are making increased profits from F&I at the time of the sale, F&I revenue sharing provides a further opportunity to realize revenue for the life of each policy. F&I sales are accomplished through a unique, collaborative partnership between insurer, agent and dealer, and as the final dealmaker in the process, it is a natural progression for dealers to have an opportunity to share in the long-term revenue.


8. The talent and skill of the F&I manager and the agent are what will drive PVR growth

While new technology speeds and improves the sales process and full transaction transparency increases your efficiency, it is the talent and skill of your F&I manager and agent that will drive your PVR growth. We believe that behind every great finance manager is a great agent — one who can provide the proper tools, processes and training for the whole dealership.

9. Know your dealership!

To maximize your F&I sales, know your dealership. Where is the F&I process being started in your dealership — on the website, at the sales desk, showroom floor, F&I office? Ideally, it should begin as soon as possible. If feasible, add F&I options to the website. If adding to the website is not an option, introduce the menu at the sales desk or showroom floor. Studies have shown the earlier you introduce F&I options, the more likely the customer is to purchase.

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