We reached out to two companies to answer this question and better understand both the dealer’s needs, and the customer’s.
When CDK Global hosted its inaugural industry conference known as CDK Connect virtually this year, Brendan Dougherty, Director of Product Marketing at Roadster, pointed to the fact that modernizing the car buying experience involves making it easier for dealers to sell.
Dougherty was talking about modern retail at the time, which his colleague CMO Michelle Denogean described as “every touchpoint that your dealership has, and it’s every system you use to sell.” And that includes finance and insurance.
To better understand what may be holding dealers and their F&I departments back from providing the ultimate experience to consumers, we reached out to DecisioningIT—a new startup that launched nationally in Canada in 2021.
But new technology, although plenty helpful, is not the only challenge that F&I is facing.
The company aims to generate greater convenience and control with self-service technology because—as DecisioningIT’s CPO and Co-founder André-Martin Hobbs notes—not all F&I managers are equipped today to provide more transparency, faster transactions, and greater options for consumers that complete their transaction online.
“The same thing can be said for non-prime in standard stores,” said Hobbs in an interview with Canadian auto dealer. “Unfortunately, if managers are not equipped to get a non-prime consumer financed easily, that may not get worked on and consumers will just never get financed. So that transaction will go to another store.”
Hobbs said the non-prime Canadian average has historically hovered around the 20 per cent mark. But new technology, although plenty helpful, is not the only challenge that F&I is facing.
He and his colleague, CEO and Co-founder Rosa Hoffmann, said there is also a lack of knowledge on the F&I manager’s side. That, combined with the industry’s sometimes slow evolution or adoption of new technology, is the reason Lucy was created.
Streamlining the process with AI
Lucy is a FinTech framework, powered by artificial intelligence, that allows dealers to match a borrower with various financial institutions’ credit parameters to boost conversions and get more consumers financed.
Hobbs, who currently owns and operates four dealerships in Quebec, is the mastermind behind the platform. It was built to be user-friendly, reliable and fast, and importantly, to take the guesswork out of the F&I manager’s job.
“We get 85 per cent of all consumers that apply in a location pre-qualified at credit,” said Hobbs. “And we match the payment call with the inventory within our tool. So we do that in a few seconds, which allows F&I managers not to lose time.”
“If we don’t listen to them, we will become a commodity and not a solution,”
— Marc-André Lefebvre, LGM Financial Services
How much time do F&I managers save?
For non-prime, Hobbs estimates that it can take them between 30 minutes and four hours to do the job manually—from the actual consumer application down to the sale, or ensuring the inventory is selected, and so on. When all that information is entered into Lucy, the time it takes for the manager to work through this process is between six to 16 seconds.
On the prime side, the process is all done automatically—but it is still a 15-minute process. Hobbs said they can cut that process down to just a click of a button.
“There’s no waiting. You just click on a button, maybe a second. So it’s 15 minutes down to no time, and Lucy gives you choices,” said Hobbs. “So you can simply look at what Lucy suggests, choose, pick, and select the best scenario and go with it. That’s how easy it is.”
Hobbs said the process is streamlined and easy for F&I managers and consumers. Their goal is to get that 20 per cent non-prime average down to 10 per cent.
His colleague Rosa Hoffman believes the industry is about to experience a “very big” increase in the non-prime space.
“I think that things like the Lucy technology that allows customers to have a little bit more transparency and more options—they should be adopted. They’re there to help you be profitable, to help your customers, and to take you into the new age,” said Hoffman.
However, Lucy is not meant to replace human interaction or face-to-face situations; it is an AI assistant that can pre-qualify consumers automatically online, but there is still someone in the background doing the work that needs to be done, such as delivery.
Lucy is one example of how F&I can deliver on the convenience that customers want, while also enabling dealers to better sell the products. But there are other areas that need to be addressed.
Selling is about listening
To provide a different viewpoint, we asked Marc-André Lefebvre, Vice-President of Sales in Quebec for LGM Financial Services, what he thinks is holding F&I back from delivering the convenience customers crave.
“I don’t think there is anything holding the F&I manager back from providing the convenience that the consumer is looking for,” said Lefebvre. “I think that what creates this is sales managers that, at all costs, try to sell products that are more profitable to them, while ultimately forgetting the consumer.”
He said there is a misconception that F&I needs to offer certain products over others. They just need to offer products that meet the needs of the consumer, and from that point onward everyone will be happy.
“Sales managers are mostly thinking about meeting their numbers and delivering on that, but at the end of the day does that really deliver more profits to the dealership? Possibly not,” said Lefebvre, adding that “It is a question of changing one’s mentality, and the pandemic is moving (the industry) towards that.”
He said many consumers did not visit the F&I office during the pandemic; rather they entered the purchasing cycle online, and as a result felt less stressed/more relaxed.
“It’s a matter of listening,” said Lefebvre. “Selling is about listening to the customer.”
This year, LGM set up a new training with an ethical point-of-view approach that is free for all dealers. It focuses on how to work in a fashion that allows dealers to retain customers, while also serving them in a way that meets their needs. Lefebvre calls it “soft skills” training, which helps orient dealers more towards things like how to speak to a client—and not just at the F&I office level, but throughout the dealership.
“If we don’t listen to them, we will become a commodity and not a solution,” said Lefebvre.
LGM also revamped its online training, launched loan protection, and credit insurance for customers that end up not using their credit but return to the same dealership, and a list of other things. They also implemented AI to automatically approve dealership claims, which both simplifies and speeds up the process.
“Technology, even for dealerships lacking staff, is a reality for everyone,” said Lefebvre. “I think technology is going to be one of the things that will help us out.”
Overall F&I is moving forward, but to meet the convenience customers truly crave involves the industry adapting to new technologies that help dealers sell, while dealers themselves may need to brush up on some training and keep an eye out for opportunities.
And while opportunities may not appear to be in abundance, there are opportunities to be had, if we can avoid letting them fall through the cracks.
