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Online F&I: Worth it or impractical trend?

Woman on laptop at home
Article Highlights:

  • Online F&I doesn't have to take away from your profitability or compliance.
  • Use these 3 tips to make sure you're completing it successfully.

Do you find yourself questioning whether online retailing is really worth the hassle? Be honest, do you secretly hope it’s a trend that passes after the pandemic ends?

If you answered yes to those questions, you might be disappointed to learn that digital retailing probably isn’t going away anytime soon. In fact, about 20% of consumers would like to complete their next vehicle purchase entirely online.[1]

You might have some apprehension about taking your processes online – especially in your F&I department. The good news is, you don’t have to sacrifice F&I profitability or compliance to bring your customers a digital experience. But, it’s not enough to simply offer online options for customers, you have to be able to actively sell in order to see success. Three simple tips can help ensure your F&I processes are up to par for a digital retailing environment.

1. Keep customers engaged.

Many customers are focused on the purchase of the car itself and do not have vehicle protection products top of mind. How do you get customers to look at products and maintain your backend profit if they’re not with you in person? You might be tempted to send them a link to a site where they can browse F&I products on their own. While it can be great for customers to educate themselves, it usually takes talking to an F&I manager to actually close the sale.

Even if you are engaging with customers, it can be tough to interest them in vehicle protection products when you’re only able to have discussions over the phone or worse – email. While you’re trying to present important information, your customer could be at home multi-tasking, distracted, or even willfully ignoring your calls and messages. Use of video conferencing can help capture a customer’s attention with face-to-face interaction and allows you to use visuals when explaining product options. This can improve your customer’s understanding and your ability to sell to them.

2. Pay extra attention to compliance.

Extra vigilance is required when completing transactions remotely because additional rules come in to play on top of the already extensive regulations required for in-person F&I. For your transactions to be compliant, your customers must use proper technology that allows them to fully participate in the process and receive proper disclosures. Use technology that documents your customers are in fact receiving required information and electronically completing paperwork.

In addition, as with traditional F&I, regulations are constantly changing, and it’s easy to miss signatures or other important information when reviewing documents. Technology that alerts you to missing information can help ensure paperwork isn’t rejected for compliance reasons. The last thing you want is to reach out to a customer to re-sign a document when they thought they had set themselves up for efficiency by completing everything remotely.

3. Complete as much of the process online as possible.

Customers choose to buy online for many reasons, but convenience is usually a big incentive. Try to make the process as simple and easy as possible for them. The more of the transaction you can execute electronically, the better. Due to some state regulations, it’s not always possible to sign the deal completely electronically, but signing some paperwork digitally is better than none at all. Make sure you also have a way to provide electronic documents to customers once the deal is complete so you can be as transparent as possible and customers don’t end up with stacks of paperwork delivered to them.

The F&I process can be complicated in-person and may seem even trickier to take online, but the potential backend profitability and increase in CSI, if you’re doing it successfully, is worth the effort. Following the above tips can help you get off on the right foot with your digital retailing efforts, so you don’t have to figure out best practices through trial and error. Your employees and your customers will thank you for it.


[1] The Changing Automotive Landscape From In-Store to Online

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Senior Manager of Product Planning

Tim Yalich was a senior manager of product planning at Reynolds and Reynolds for F&I solutions including eForms, Menus, eContracting, and the docuPAD® system.

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