In the latest installment of the annual Power 300 issue of Auto Remarketing, we go behind the scenes with some of the leading companies in the used-car space and their top executives with a few Q&A features.
Next up is Jason Barrie, vice president and general manager of Dealertrack dealer F&I solutions.
Auto Remarketing: How are some of the top dealers utilizing financial technology resources to improve the car-buying process for consumers?
Jason Barrie: As consumers, we experience technology enabling everything we do in our daily lives. Where to eat, where to shop, where to buy a car. Today’s consumers are more informed than ever before thanks to mobile technology. We found through our recent Cox Automotive study that nearly two-thirds of consumers are more likely to purchase F&I products if they learn about those products on their own time. By equipping customers with the tools to research their F&I products before they come into the dealership, dealers are providing consumers with the deal shopping experience they want, all while maintaining the needed controls around the deal to generate profits and increase F&I product penetration.
Once the consumer comes into the showroom — which by the way, 87 percent of consumers have indicated they want to come into the store to finalize the deal — using interactive technology on mobile or touch screen devices and tablets is a powerful way to engage the consumer and support the F&I experience. Technology isn’t replacing the F&I manager or sales person; it’s enabling dealership personnel to deliver a more interactive experience for consumers. One of our top dealer partners, Straub Automotive, a very progressive dealership group based in West Virginia, has adopted this approach and has seen significant gains not only in their sell thru rate of protection products, but they also saw their net profit per unit climb.
AR: What are some of the advantages — and challenges — for dealers who approach F&I online at the front of the car-buying process, versus those who leave it to the end?
JB: The advantages are clear. Upfront, online F&I selling addresses one of the main consumer pain points — interacting with the F&I department. Our 2018 Cox Automotive Car Buyer Journey Study showed allowing a consumer to start the F&I process online streamlines the in-store experience and makes better use of the time spent with the F&I manager. Consumers want to learn about finance and insurance options that will protect their investment and add convenience to car ownership. But consumers are demanding a faster, more seamless purchase process from automotive retailers. The challenges posed, while manageable, exist with any technological investment, such as ensuring the digital infrastructure is in place and works well enough to deliver a better shopping experience. But the investment pays dividends in both the short and long haul.
AR: We’re seeing more market introductions by alternative mobility models such as subscription programs and fl exible leasing. What is driving these alternative ownership models?
JB: Alternative ownership models are opportunities for dealerships to really analyze the experience they are delivering for consumers and use their sales and F&I data to improve the experience consumers demand, whether that be through the use of technology or having dealership personnel take on different roles at the dealership. While we call this the ‘digital age,’ it’s really being driven by the ‘consumer age’.
This doesn’t equate to dealers losing out in the long term. What it does mean is that dealerships that make adjustments to the car buying process through the buy-in of technology and the cultural processes that come with it are the ones fi nding the most success at attracting and retaining customers.
AR: What should dealerships do to set themselves up for future F&I success?
JB: Dealers can set themselves up for success through two pillars: One, technological infrastructure. It’s all about having the right technology in place to deliver this desired consumer experience. Whether it’s tablet-based Wi-Fi for econtracting or menu selling, or credit application and real-time payment calculator options on your digital storefronts, this kind of infrastructure is what shoppers in the consumer age are looking for.
Two, culture and training. To reap the full benefits of the technology, your staff must be fully onboard with the change and trained on the new process. Change can always be hard for dealership staff . Providing your staff with the ‘why’ behind the value of using technology to enable a better process is a critical factor in delivering better results for your store, and a better experience for consumers.