A Revolution is Coming

Can you remember the last time you walked into a fast food restaurant and they filled your drink order? It was a short few years ago when the restaurants started handing you a cup and you dispensed the ice and your drink of choice.  The shift happened as consumers demanded a better, quicker experience.  Now, order kiosks are being introduced to eliminate further wait time.

While established dealership vendors have built iPad and Docupad platforms to improve the overall customer experience in the transition to F&I, this segment of F&I technology is about to burst with robust competitive offers. Startups are now beginning to appear on the scene with full online financing capabilities. In addition, manufacturers are now investing in online financing technology.

In December of last year, AutoNation launched its first online financing offering, allowing customers to value a trade-in vehicle, determine payments and apply for credit.

In June, CarMax, Inc., the biggest U.S. used car dealer, announced the rollout of a new online financing initiative to help customers pre-qualify for financing before entering the dealership.

In October, Automotive News reported on a dealership in California that was using Express Storefront, an online-buying platform from Roadster that allows shoppers to select a vehicle, get approved for credit, sift through F&I options, and set up vehicle delivery.

Even Equifax is dipping their toe in the online financing product market. This past month, John Giamalvo, the vice president of dealer services at Equifax, spoke at the National Remarketing Conference, discussing his company’s soft-pull tab that allows customers to get a free credit report without affecting their credit. In his presentation, Giamalvo stated that he sees growing evidence that car shoppers are ready to do more of the financing process online.

Also in November, a partnership between Drive Motors, RouteOne and Dealertrack made headlines with a collaboration that resulted in an online checkout feature for dealership websites. The feature allows customers to structure their deal online before finalizing and taking delivery of the vehicle. This creates a 24/7 sales funnel, where customers submit their information at any time of day or night. The information automatically populates into the dealership’s Dealertrack and RouteOne platforms, saving an enormous amount of time in the store.

Now, Hyundai is entering the fray, announcing its own direct-to-consumer fully-digital car buying, financing, and home delivery portal being launched in the UK.

While we are slightly ahead of the fast food industry in some respects, it’s becoming clear that the evolution of the auto dealership is about to go into hyper-drive. The horizon of someone perfecting the kiosk for automotive sales/F&I/service is not decades away, and the industry will follow quickly. As more capital is being funneled into financing technology, it’s important that dealerships begin addressing how this technology will change their business model.

Just because customers will be able to structure their deal online doesn’t mean sales and F&I personnel won’t be necessary. So what’s going to change?

Qualifications for New Hires

In the coming years, sales and F&I personnel will need savvy technology skills. The internet sales department will expand, while traditional sales roles will morph as more customers look to complete more of the total sales effort online. This has the potential to bring in more Generation Y and Z talent, as they are the two most tech-savvy generations to date. Considering that dealerships have struggled to attain and retain Gen Y in a more traditional sales role model, this new model could help open up greater opportunity within this demographic.

Road to the Sale Training

As customers self-select and qualify themselves for the vehicles they want, sales personnel will have the opportunity to move more quickly along the steps in the road to the sale. They will, of course, start with building rapport and establishing a business relationship. However, salespeople will be able to go right into asking for the sale and overcoming objections based on using data from the customer’s vehicle selection and deal structure. In addition, they can use the deal structure as a baseline for negotiations. Then, they will turn the customer over to finance as the finance manager will still need to confirm the correct information, provide any regulatory notices, and submit the loan application to the lender.

F&I Training

The F&I process will remain largely the same, however it will move at a faster pace. Having a preliminary deal structure complete before the customer is turned to F&I will speed up the overall F&I process, as most of the customer’s down time in a dealership is directly related to the F&I manager pulling together all the necessary paperwork. After introductions are made and information is verified, the manager can move right into submitting the deal and preparing the menu. Because customers have already reviewed the products and self-selected the ones they want, the manager can tailor their menu presentation to the ones the customer left off the deal. They’ll give a more in-depth overview of those products, respond to objections, and get a commitment.

Lender Relationships

Lastly, as everything becomes more streamlined, cultivating lasting lender relationships will become more prominent in the F&I office. It will be all too easy to let deal submissions and approvals be automated. However, F&I managers need reliable lenders for those customers who can’t get qualified online, or who might have missing information in their deal. The automation of the F&I process should help free up F&I manager time to manage contracts-in-transit, and ensure they have the most up-to-date lender criteria and are meeting each lender’s goals for look-to-book. Remember, the better the relationship with the lender, the more likely they are to extend credit to those customers that fall outside their criteria.

While technology and automation is coming to the sales and F&I process, it’s important that dealers, sales and F&I managers focus on how that technology will benefit them. Sales and F&I personnel will still be needed, with slightly different training and skills sets. Those who are in the business today will have the opportunity to train on the technology as it evolves. While younger competition will creep up, those who are proactive in implementing and learning how to work with automated processes will have a leg up in a business environment that is much more focused on the customer.