How the Pandemic Altered Dealers' F&I Product Makeup - AutoSuccessOnline
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How the Pandemic Altered Dealers’ F&I Product Makeup

Dealers are looking for ways to maximize their opportunities in offering F&I products that cater to new shopper needs.

Travis Wools is vice president of marketing for Protective Asset Protection. A marketing and communications veteran, Wools has 14 years of automotive industry marketing experience, as well as background in market research, digital media and advertising.

The industry has seen more than its fair share of changes since the beginning of 2020. With much of the country on lockdown early in the pandemic, dealers were forced to expedite their digital retailing operations, enabling consumers to not only research for a new vehicle from the comfort of their home, but also have the power to secure financing, protection programs and complete transactions of the purchase without leaving their home.

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This brought about great changes in the way people conducted research and made selections of the F&I products they chose for their new cars. When factories shuttered, placing disruptions to the supply of new cars and trucks, millions of people turned their attention toward used vehicles, making the selection of F&I products, such as vehicle protection plans, more important.

Continued Challenges for the Industry

While this was written in the final month of 2021, many challenges continue to exist. Consumers, retailers and lenders continue to build on the momentum of digital retailing, especially with the spread of the Omicron variant growing each day. 


Further supply challenges for new vehicles from semiconductor chip shortages as well as other critical parts and supplies have also continued to place a strong emphasis on used vehicle inventories throughout the year.

Different Vehicles on the Lot Mean Different F&I Needs

These continued changes have further reshaped not only the way people shop for vehicles, but also the type of vehicles they’re shopping for. As a result, the type of F&I products they’re seeking out at the dealership have also undergone a shift, and dealers need to realize how these changes in preference reshape which F&I products they carry in their portfolio. 


In a recent survey of more than 2,000 F&I managers and dealership executives, approximately a quarter of respondents said the sale of F&I products to customers increased between 5 and 10% in 2021 compared with 2020.

The pandemic created an opportunity for dealers and their F&I departments to offer more digital tools when customers are researching and selecting F&I product options for the vehicles they are shopping for. Forty-five percent of dealers now make F&I product information available online, followed by financing options/loan application (35%) and F&I product selection and pricing (33%).

Other key highlights of new F&I product trends:
• 44% say the ability to adjust products offered based on a customer’s needs are most needed to sell F&I products online; followed by the ability for customers to select product and coverage options (41%) and online tools like videos to explain product benefits (38%).
• 42% say increased coverage for existing protection products, such as vehicle service contracts, would be the most impactful to improving F&I product sales; followed by a more diverse set of F&I product options (41%) and more F&I products designed specifically for used vehicles (37%).
• 38% say selling F&I along with increased transaction prices represent the biggest opportunities in selling F&I products today versus pre-pandemic; followed by longer loan terms (37%) and more EV/plugin sales (36%).


Most F&I products have remained somewhat stable in terms of the breakdown of what was sold pre-pandemic versus today. However, the largest jump since the pandemic began has been identified in theft-deterrent systems. Twenty-one percent of dealers reported selling these systems prior to the pandemic, and today this number has jumped to 31% of dealers. This is mostly because many cars, even after purchase, are remaining parked at home as more people work from home today or continue to work in hybrid home/office settings and seek extra security for their vehicle.

Digital Retailing Also Reshapes the F&I Lineup

Along with these changes in F&I product focus, a greater emphasis on digital retailing, online shopping, used vehicle and EV/hybrid product sales, means a larger number of dealers are looking for ways to maximize their opportunities in offering F&I products that cater to these shopper needs. Expanded F&I product lineups, customized product offerings and additional F&I product education for both the dealer and their customers are all growing in importance for today’s transaction-focused environment.


America looks vastly different today compared to just a few short years ago, especially with the way we shop for everything — including cars and trucks. Because of this, consumers have quickly adapted to the new ways in which they customize their vehicle purchase and that includes the F&I options they select on their vehicles during the shopping phase. As more dealerships embrace this change and leverage flexibility, agility and a changing F&I product makeup, they will not only sell more vehicles, but they’ll also sell more F&I product options that truly satisfy their shoppers’ needs.

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