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Industry Disruption

AFIP chief is excited about revolutionary paperless software that could change more than the F&I process.

March 2016, F&I and Showroom - Feature

by Dave Robertson

Photo courtesy of iStock. 
Photo courtesy of iStock. 

Top car industry executives are constantly looking for a window that offers a glimpse into the future. For those plying the F&I trade, that window will open at this month’s National Automobile Dealers Association’s convention with the introduction of a state-of-the-art F&I software program.

This groundbreaking package allows dealers to manipulate finite fields of electronic data into a nearly infinite number of new or improved ways of doing business — ways that extend well beyond the confines of the F&I box. It is as revolutionary as it is evolutionary.

I was introduced to the program by the visionary who set this endeavor in motion. He is a longtime AFIP industry member who wanted to join our growing roster of product providers and dealer clients by establishing a direct link between the new program and our certification curriculum.

As a moderately jaded 40-year industry veteran, I’ve seen too many “next big things” wither on the vine. Our industry is famous for installing the latest and greatest product in a couple hundred stores before anyone knew for certain whether it would actually do what the dealers were told it would do. Not so here. Each innovative component was beta tested by more than 250 dealers before its integration into the system.

The digitization of funding agreements opened the door to this program’s industry-changing potential. The advent of econtracting underscored the administrative efficiencies and heightened NPI protection inherent in paperless transactions. The Vegas-launch software addresses every aspect of the F&I process, including echeck payments, single esignatures for all documents and 10-year digital storage.

AFIP does not endorse specific programs and does not have a pecuniary interest in its members’ (and nonmembers) products, which is why I’ve left out the name of the technology. My interest in sharing the potential benefits and ramifications of this program, and any others like it, is to enlighten readers who are willing to embrace and capitalize on strategic opportunities. Whether the software will meet your specific needs will depend on your situation.

Let’s explore six impacts the new software could have on your operation and the industry as a whole:

1. Expand Data Connectivity

The new software is a subset of a fast-approaching brave new cyberworld in which every facet of our personal and business lives will be influenced by the capture and manipulation of data collected from every conceivable source. For our industry, the digitization of every relevant source of information available to a car dealer triggers an exponential expansion into ways in which the resulting data pool can be used to benefit dealers and providers alike.

2. Rank F&I Producers

The digitization of every relevant element of each F&I producer’s activity expands the parameters for identifying and trending key aspects of each producer’s performance. As the number of users grows, plans call for the implementation of a program whereby producers can rank themselves against their in-store cohorts, as well as with similarly positioned peers industrywide, as they aspire to elevate from Bronze to Silver, Gold and Platinum status. The rankings will change annually as producers float up and down the metallic scale.

3. Create a Millennial-Friendly Sales Process

F&I menus provided a more effective means for alerting prospective buyers to the full array of protection products and offered the convenience of bundling. However, they were more organizational aid than marketing tool. The new program’s clean-sheet-of-paper approach enlisted the skills of highly qualified professionals and technicians from diverse disciplines outside the automobile industry.

The system’s menu incorporates cutting-edge psychology and neuroscience techniques to create a nonconfrontational sales environment. The prospective buyer holding the electronic presentation tablet will have access to all of the available products while maintaining control over the selection process, and the adversarial undercurrent inherent in an upsell approach was replaced with a “deductive selling method” in which the customer is free to delete unwanted items while retaining products in which he or she finds value.

4. Rethink Lead Generation and Inventory Management

In most dealerships, the information conveyed by prospective and current customers is keyed — or recorded — in a format that can be entered into a computer. If the dealer sold the vehicle, a wealth of statistical information already exists. Granted, the data collected serves a useful purpose for the dealership employee who has access to it. However, these applications are typically administrative and departmental in nature.

The new software consolidates the diverse sources of existing data to create externally oriented proactive lead generation and inventory-management tools. The program “mines” this newly created data vein through an application program interface (API) and task-specific algorithms to transform diverse bits of information into practical, user-friendly and profitable dealer benefits.

Photo courtesy of iStock. 
Photo courtesy of iStock. 

5. Find the Hidden Trade-In Profit

The program’s developers understood the need to wring the last penny of profit out of every trade-in. Current manual systems are better than nothing, but they are cumbersome to use and limited in scope.

The developer’s solution: Digitize the necessary information from all available resources, subject it to innovative algorithms and generate vehicle specific data to maximize the profit of every vehicle traded in, then do it again when the vehicle is resold by the selling dealer. The developers project that proper application of their software will add an average $300 in profit to both the trade evaluation and the resale profit.

6. Allow for Compliance Assessments

The reason the CFPB is encouraging car dealers to go paperless is to facilitate online regulatory compliance audits. However, the sword cuts both ways. By capturing 100% of the deal-related data in real time, the system’s software gives the dealer first crack at subjecting every element of each transaction to a state and federal regulation compliance assessment.

7. Promote Total Relationship Management and Training

The accumulation of massive amounts of data — coupled with an expansive array of sort fields and algorithmic analysis — can be used to enhance virtually every aspect of a dealer’s operation. It will help identify marketing opportunities, operational and cash-flow efficiencies and compliance status.

8. Create a P&A and Dealer Nirvana

The fates of every aftermarket provider, underwriter, direct or general agent-based distribution network and dealer client are dependent on whether the book of business meets its actuarial expectations. That is, until now. In the very near future, a record of the miles driven and the period of time over which they accrue will be recorded through a device inserted into the access port of every covered vehicle — and transferred electronically to the program’s database.

An assessment of the book’s profitability is no longer tethered to an actuarial assumption. It’s based on the real-time performance of the vehicles covered by service contracts. Posted reserve deficiencies will be spotted earlier in the earn-out period, with the shortfalls more accurately identified. Producer and dealer performance will be more efficiently monitored and managed. Best of all, profit can be taken as soon as it’s realized.

With the wealth of practical dealer and provider benefits revealed at this program’s launch, this might be one time when what happens in Vegas shouldn’t — and won’t — stay in Vegas.

David Robertson is executive director of the Association of Finance & Insurance Professionals (AFIP). Email him at

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