Recognizing the consumer demands for flexibility and convenience, the F&I office is being revolutionized, and much of the automotive sales process has moved online. Here to discuss some of those changes is Gabe Garroni, Senior Vice President of Insurance Sales at Ally.
1. Garroni begins by explaining the differences between digital and virtual F&I processes, noting a positive trend in their adoption. Digital F&I refers to the use of digital tools and online platforms that allow customers to engage with financing and insurance options through websites, apps, or other digital interfaces. On the other hand, virtual F&I implies a more interactive and personalized online experience, likely involving real-time communications.
Garroni further highlights Ally’s successful pilot programs, indicating a growing preference for remote, virtual interactions in the F&I sector, partly influenced by the pandemic’s shift towards online platforms like Zoom.
2. Garroni acknowledges the increasing consumer expectation for digital transactions in car purchasing. He stresses the importance of providing a flexible process that accommodates consumers’ timing and location preferences.
3. Addressing the specifics of F&I for electric vehicles (EVs), Garroni notes that while the financial aspects of purchasing EVs are similar to traditional vehicles, there are specialized service contracts for EVs, which Ally can assist with. However, the overall approach to consumer protection products like GAP insurance and tire road hazard remains mostly unchanged.
4. When it comes to higher interest rates, Garroni points out the significant effect they have on consumer purchasing power and car payments. Despite these challenges, he observed stability or growth in the penetration and margins of crucial F&I products like VSC and GAP.
5. According to the most recent Ally dealer insight survey, dealers are prioritizing a range of financial structures for profit participation, comprehensive training in sales, compliance, and leadership in 2024. They also indicate a great need for operational support, particularly in claim handling and overall service department efficiency.