Survey shows how dealers struggle to grasp potential of F&I programs


A recent survey of dealers showed how some operators are struggling to understand the complexities of F&I programs, resulting in limited penetration during vehicle deliveries.

Protective Asset Protection, which operates dealer-owned warranty programs (DOWC) and other F&I products for dealers, recently conducted an online survey of 1,500 dealer professionals in the U.S. When asked about the biggest challenge with their current F&I products, 29 percent of dealer respondents said both “too much of an administrative burden," and “doesn’t offer enough margin for the dealership.”

When asked why they don’t use a dealer-owned warranty product, 27 percent of respondents said it sounds too complicated for them. Another 24 percent of participants added that they don’t want to change from their current program.

Meanwhile, another 21 percent of store managers surveyed acknowledged that they both “don’t understand how the program works” and “not sure how it would benefit their dealership.”

Protective Asset Protection explained in a message to SubPrime Auto Finance News that the company polled franchise and independent dealers that range from five to 50 rooftop locations. The number of vehicles these stores sold each month varied. But Protective Asset Protection indicated “it is safe to assume” the range fell between 15 and 100 units or more each month.

And those participating stores appear to be having some struggles with F&I product penetration.

The survey determined only 12 percent of dealers said more than 50 percent of their customers purchase a vehicle service contract, and only 6 percent said more than 50 percent of customers purchase an ancillary product, such as tire and wheel, appearance protection, windshield and key fob coverage.

Protective Asset Protection officials explained what segments of the survey results they expected and which parts came as a surprise.

“From the results, we learned a few key things that continue to have an effect on dealers and their businesses,” they said. “First, many dealers are still unaware of how a dealer owned warranty company program could benefit them, or that it is not as complex an undertaking as many believe.

“With our acquisition of US Warranty Corp., we’ve added what we believe to be the foremost authority on DOWCs. We think it’s important for a dealer to be exposed to a full range of participation programs so they can make a truly informed decision,” they continued.

“Second, margins remain a key to success. We know that SAAR is falling from past years, and a well-managed F&I program is a great way for dealers — both franchised and independent — to realize greater margins,” Protective Asset Protection officials went on to say. “Turning back to the DOWC opportunity, dealers can have more control over their F&I program without taking on the entire administrative burden, since they become the owner of their F&I products.

“Third, the results of this survey show that there is still room for improvement on the volume F&I products sold to customers. Having the right F&I program can result in higher customer satisfaction levels throughout the ownership cycle,” they added.

Protective Asset Protection officials also described what the reaction is like when the understanding clicks for a dealer about how dealer-owned warranty programs could be beneficial. 

“Our network of dealers is extremely pleased with the results of their DOWC programs, largely because the USWC team has been offering this unique program for over 40 years,” they said. “Dealers see margins increase from their F&I products.

“Plus, the level of administrative support they receive from us, along with the trust and credibility of the products offered to their customers, really seems to lead to more satisfied customers,” officials added.

The company also mentioned how will the study results can benefit both Protective Asset Protection as well as dealers looking to expand their profit potential.

“One of the things we found in the study is the lack of awareness, understanding and misperceptions that still exist for a DOWC,” the company said. “We’re hoping the results of this study allow us to continue to build the conversation around the benefits of DOWC, particularly since the dealers in our network have demonstrated the results they have thus far, leading to higher profits and customer satisfaction levels.

“Really we want to help dealers see that there is a full range of participation options available. Whether it be a DOWC, CFC, NCFC, we’ve been helping dealers find the right option for their needs for a long time and we see the results of this recent survey as an indicator that there,” officials went on to say.

Protective Asset Protection provides vehicle protection plans, GAP, ancillary products, training and other F&I services through vehicle dealerships. Protective Asset Protection has been serving dealers for more than 55 years.

More details can be found at