Since the widespread containment efforts caused by COVID-19, dealerships have been among the hardest-hit industries.

Much of this is as a result of dealerships either being forced to close, limited to online sales, or if they’re still open the virus has limited foot traffic in the showroom.

In fact, as of April 16, 24 states allowed dealership sales operations to remain open, according to J.D. Power. Another 23 states have allowed only online or remote sales. Michigan has only recently relaxed its ruling to allow online sales.

This means that contactless transactions are, at least for the near future, priority one in the transaction’s playbook for dealers. Because of this, F&I must play a leading role in helping educate people online during the research, transaction and post-sale phase of each sale.

Sales taking a significant hit

Preserving the transaction is the main priority currently as a result of the ongoing COVID-19 pandemic. The reason? IHS Markit recently lowered its global auto sales forecast for 2020 down 22% to 70.3 million units. It says the U.S. will fall 26.6% to just 12.5 million new vehicles sold, the lowest level since 11.6 million sales in 2010.

Where F&I can help the online process

If they weren’t focused here before COVID-19, dealers are now full speed ahead with online digital retailing options for customers. As part of this, more dealers are beginning to leverage additional online education of F&I options when shoppers are beginning their research online.

Dealers (and lender partners) want to make sure their customers are matched with the right vehicle, loan and terms up front. When it comes to additional F&I options, dealers want to leverage the online experience to remove any friction that historically was perceived to take place toward the completion of the deal inside the F&I office. While many F&I options can be beneficial to a car buyer, such as vehicle service contracts and ancillary protection plans, the customer may perceive these products as “upsells” at the last minute inside the F&I office.

Even before the COVID-19 pandemic, this friction was an issue. According to a recent industry survey, approximately 87% of car shoppers disliked some aspect of car shopping at dealerships, with the majority saying they felt pressure to buy right away or to buy additional F&I features. This pressure and mindset is reduced when car shoppers have information ahead of time on F&I product options. This allows them to research the benefits of these products in the comfort of their own home, as opposed to being in the F&I office where they don’t have time to make proper considerations.

Completing the transaction outside of the dealership

F&I can also be a great benefit to the contactless transaction at the completion of the deal and when the consumer then takes ownership of their delivered vehicle. Paperwork must be completed online through F&I and therefore it is imperative that each dealer has a robust and reliable online digital contract process necessary to complete each transaction outside of the dealership.

This “new normal” will certainly be critical for all involved – dealers, lenders and customers – in the near term, but the COVID-19 pandemic may also serve as a catalyst for longer-term change. As more dealer sales and F&I personnel are forced to work from home, and as consumers are weary of visiting dealers in person with physical handshakes, contactless transactions will continue to grow. Having the necessary digital retailing tools and resources available will not only help sales grow again, but over time it will help dealers build trust they need inside their communities.

Tim Blochowiak is vice president of dealer sales of Protective Asset Protection, a full-service provider of F&I programs offering vehicle protection plans, limited warranty programs, GAP, ancillary products, training and other services through vehicle dealerships. For more information visit