Page 7 - MIADA-Q2 2021

F & I HI GHLI GHT

USED INVENTORY IN HIGH DEMAND:

How Dealers Can Sell More

F&I Products in 2021

By Tim Blochowiak
Consumers today have a diverse set of needs that match various F&I products.

Over the last decade, consumer focus has It is critical for dealers to understand • Five years ago, dealers reported most
shifted to cutting-edge electric cars and their customers’ wants and needs. F&I car shoppers purchasing F&I products
feature-loaded new SUVs and pickup partner providers are now taking more of such as tire and wheel protection
trucks. However, entering 2021, used a consultative approach to understanding (37.9%), exterior appearance products
cars are among the automotive industry’s the dealer’s goals to properly align products (37%), windshield repair (35.6%), and
hottest commodity because they offer and services that help dealers reach their key fob replacement (34.8%). According
many of the technology features and business and financial objectives. to Protective Asset Protection’s 2019
convenience packages consumers want at F&I Trends report, consumers today
a more affordable price. What’s more, the pandemic expedited the have prioritized ancillary packages in
integration of digital retail requirements the following order: key fobs, tire and
Consumers today have a diverse set of for dealers. Consumers have been wheel replacement, windshield repair,
needs that match various F&I products. demanding a more digital shopping exterior appearance protection, interior
experience in the automotive space protection, and theft deterrent2.
With so much emphasis on used cars prior to the pandemic. As a result, more • GAP: In the event of a total loss or
today, auto retailers must ensure their F&I dealers have implemented digital retailing unrecovered theft, GAP will, in most
product portfolio matches the various elements to incorporate F&I product cases, pay the difference between the
needs of their customers looking for used options and education earlier in the online actual cash value and the scheduled
instead of new. process for car shoppers. balance owed to the lender. While
GAP is not a new product, it has grown
Consumers today are hot after used With used inventory in high demand, in popularity over the last few years
vehicles so they can avoid trains, buses, here are the product trends we’ve seen because of an increase in claims due to
or Ubers during the pandemic, while developing in recent years: more accidents with more cars on the
enjoying the independence of vehicle road; insurance companies are more
ownership. As demand for used inventory • Pre-Owned Vehicle Service Contract likely to total vehicles due to the rising
continues to rise and manufacturers adjust Programs: With multiple levels of complexity and cost of replacement
to production capacity brought on by the coverage and a range of model years parts, in conjunction with falling
pandemic, dealers need to ensure their and mileage bands, many consumers residual values (particularly for cars
F&I product mix matches the interests are choosing auto care plans for used over SUVs/crossovers and trucks); and
and needs of today’s shoppers. vehicles. more impactful weather events driving
• Certified Programs: Dealers tend to up claim payouts in recent years.
In terms of the outlook for used- gravitate toward certified programs,
vehicle sales in 2021, industry analysts such as limited warranties, because With these strategies in mind, auto dealers
at Edmunds are forecasting 41 million they offer numerous options relative will be better equipped with the right F&I
units this year, up from an estimated 38.3 to eligibility, coverage, and deductible product portfolio to meet the needs of the
million sales last year. options. Additionally, many certified growing number of people shopping for
programs offer dealers investment used vehicles in 2021. n
CONSUMERS HAVE UNIQUE NEEDS opportunities in the form of dealer
FOR USED VEHICLES participation programs. Tim Blochowiak is vice president of dealer
• Ancillary: Ancillary programs are in sales at Protective Asset Protection, a full-
Consumers today have a diverse set of high demand because they protect service provider of F&I programs offering
needs that match various F&I products. key elements of the vehicle and can products, training, and other services
Some products stand alone, while others be added individually, or as part of a through vehicle dealerships.
can be combined to better meet the combination program to complement
consumers’ lifestyles, protection needs, or the coverage a vehicle service contract
budgets. program provides.

MIADA MISSISSIPPI DEALER Q2 2021 | 7