What Does Digital Retailing Have To Do With F&I?


On this week’s episode of F&I Today, Becky Chernek talks about digital retailing and what it has to do with F&I. Why should you worry about digital retailing in your F&I department?

Digital retailing is currently the biggest trend in the automotive industry, and if you aren’t completely familiar with it Becky helps to break it down and explains exactly how it can boost your profits and help with sales.



Speaker 1: You’re watching F&I Today with Becky Chernek.

Becky Chernek: Welcome to F&I Today. I’m your host, Becky Chernek. I’m happy you’re able to join us today. We all know that F&I is vital to the dealership’s bottom line and that’s where I come in. You know, I’ve been in the automotive industry for more than 30 years, and in finance and insurance since 1989, and I’ve seen a lot. And I know how to fix it.

Becky Chernek: You know, I’ve worked with hundreds of F&I managers over the years with incredible results. I founded Chernek Consulting in 2001, and provide current and up to date best practices training, offering workshops in dealership implementation for automotive dealers throughout North America. And I can help you to significantly boost profits by using innovative upfront sales strategies. It’s a pleasure to be here with you today.

Becky Chernek: So what is digital retailing all about, and what does it have to do with F&I? If you’re not familiar with digital retailing, you need to listen up. Digital retailing is the latest trend. It’s the biggest buzz phrase today in Silicon Valley, and in progressive companies in the automotive business. So what exactly is it, and how will it affect you? What is digital retailing have to do with F&I in the first place?

Becky Chernek: Well, in order to answer that question, you’ll need to step back in time to 2005, to the days when Dale Pollak founded vAuto. Dale Pollak helped auto dealers understand how to manage their used car inventory in turn rates. It was remarkable cutting edge technology. In fact, it helped dealers see thousands of dollars in lost revenue by ridding themselves with this old age inventory that was costing them a bundle.

Becky Chernek: It was so successful, Cox Enterprise’s Auto Trader Group acquired vAuto in 2010. Four years later, Auto Traders Group, and the rest of Cox Auto Business was reorganized to form what we know as Cox Automotive. But some dealers didn’t like the idea of putting their inventory online, especially including pricing. They were kicking and screaming all the way.

Becky Chernek: In 2014 vAuto introduced Conquest, a technology platform that gave the dealer the ability to showcase their new inventory. And as you know, it’s all a catch 22. If you don’t put your vehicles online, you might as well close shop. Today it’s all about selling cars online, and making that front end profit is tough.

Becky Chernek: Dealers are making up that difference in their F&I department. So it stands to reason that it’s more critical than ever before to protect the golden goose at all costs. Customers will always mess with a good thing, and they will alter the way that we do business. It happened with Blockbuster versus Netflix. It happens with Amazon. Naysayers said Amazon wouldn’t be successful, they were wrong. Today Amazon is the number one online retailer, and competes with Walmart’s volume. And there are more than 220 million online shoppers per year in the United States alone.

Becky Chernek: Customers are shopping vehicles online, and will visit about seven different websites before making the decision to buy a car. Your website informs the customer about who you are. The customer looks at the ease of navigation, and the ease of interaction. They want that car buying to be fun and hassle free. An the effective website that gives that customer a highly personalized experience means more conversions.

Becky Chernek: Think of it this way. The website is your dealership without the walls. Disruptors such as CarMax, Echo Park, Carvana, others tout making car buying a breeze. They offer that customer not only the flexibility to shop vehicles online, but also financing. Carvana in particular offers a complete online transactional experience. The customer doesn’t even step foot into the dealership. It’s fast, it’s friendly. In fact, the customer can pick up the vehicle at a nearby kiosk, or the vehicle can be delivered to their home or office with this seven day money back guarantee.

Becky Chernek: Customers love it. Putting your financing online is not an easy pill to swallow by any means. Dealers need to be cautious how they go about it. Digital retailing is a journey that walks the customer through the entire buying experience from the time that customer touches down on the dealership website, to discovery, to selecting a vehicle, to determining a payment budget based on credit criteria, to finalizing this transaction online, with a single point finance manager or even a hybrid sales associate.

Becky Chernek: Digital retailing is not just a plugin or a calculator, or a static credit application you put on a website. It is a well thought out process. The online experience is not a tug of war with your in dealership processes. It all goes hand in hand. Some dealership groups have a dedicated professional to handle the entire transaction to finalizing the deal with a digital menu presentation to avoid any friction that can occur.

Becky Chernek: The idea is to give the customer the sense that they’re in control every step of the way. Dealers understand the importance of engaging with the customer quickly in the digital retailing environment. It’s the new touch point for meeting the customer on their terms at the dealership website. It is referred to as a frictionless buying experience.

Becky Chernek: Waiting to answer customer specific questions once they get into that F&I office just isn’t a good idea. Disruptors are breaking the code. CarMax is paving the way for the customer to complete the financing process online in every store across the country. Echo Park is adding more stores throughout the United States. Large automotive groups see the advantage of offering the customer with the ability to determine payment options in advance, and they’re going mobile. If you don’t offer the customer a way to determine payment options earlier, perhaps it will put you at a disadvantage where you lose the ability to sell a car all together.

Becky Chernek: Even the credit unions are getting into the act of offering self-desking. They offer their members the ability to determine financing upfront. Customers are walking into the dealership with a check made out for the exact amount. If you haven’t heard of Springboard Auto, perhaps you should. They are also offering the customer the ability to shop financing online in the comfort of their home, and office, and market without this dealer rate markup. They walk the customer through the entire buying process until the customer takes delivery of the vehicle.

Becky Chernek: Customers are tired of spending the entire day at the dealership buying a car. It means you’ll likely want to consider offering customers the flexibility to do some of that heavy lifting themselves. Give the customer the ability to not only shop for a vehicle online, but determine payment options based on that credit score or a soft pull analysis. Digital retailing can speed up the entire buying process, and help the customer select the right vehicle they qualify for. Which means more dealers can put themselves in a position of selling more cars and increasing their F&I profits.

Becky Chernek: Digital retailing isn’t the future. It’s here. It’s the present. Thank you for joining me on F&I Today. Be sure to come back next week, right here on the CBT Automotive Network for our next edition of F&I Today. Also, feel free to contact me regarding my consulting services. My specialty is providing F&I training, helping auto dealers achieve high levels of performance and profit by improving internal processes that begin the moment the customer touches down on the dealership website, and ends with finalizing in-person transactions, and F&I.

Speaker 1: Thanks for watching F&I Today with Becky Chernek.

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Rebecca Chernek, founded Chernek Consulting, LLC in 2001, has nearly three decades of experience in the automobile dealership industry. She started her career by working with her father at their family-owned auto dealerships in Have De Grace, Maryland. She gained hands-on skills and experience in almost every aspect of the automotive sales process: new used cars and trucks sales, F&I, Director of Finance for volume operations and general management. She was hired in 1986 as the first woman to sell cars for Al Packer Lincoln & Mercury in Baltimore, and in 1989, she was promoted to F&I Manager for Ron Bortnick Ford in Upper Marlboro, Maryland. In 1995, Rebecca took a position with the JM&A Group and was promoted to District Manager for the AutoNation division — the #1 retailer in the United States — to hire, train boost profits and implement menu selling. She single-handedly earned a sterling reputation for adding millions of dollars to the bottom line for all her accounts! Rebecca has a well-deserved reputation as a self-starter, high-performer, and spirited entrepreneur and motivator. It’s not a matter of what you think you know… it’s a matter of proving it! As a consultant, trainer and nationally recognized expert in F&I Training and sales procedures, Rebecca has helped hundreds of automotive car dealers throughout the United States and Canada streamline their processes and closing techniques and significantly increase profits. She writes regularly for Wards Business, CBT Automotive Network, Dealer Magazine, Subprime News and as a NCM 20 Group F&I Guest Expert. She facilitates for the NCM Institute, Desking and F&I Integration. Rebecca is the anchor for F&I Today – CBT Automotive Network headquartered in Atlanta, GA. Don’t forget to check out our interactive continuing F&I online education platform Chernek Consulting Virtual Pro the best kept secrets on how to be successful in F&I! Boost your F&I performance! Every dealer must have to help your F&I manager increase sales and profits while reducing liability.


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