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Writing Deals and Our Future

February 24, 2009

I never really liked blogging and cursed the day I’d have to pen my own blog. I always viewed blogs as a way for someone with too much time on their hands to play reporter. But like Jim Ziegler said during his “Technology-Enabled Sales and Marketing” workshop at the 2009 NADA Conference and Expo: “Nothing is going to stay the way it was.”

So here’s my entrance into the blogosphere. Let me kick this off with a question: What’s your vision of the F&I office of the future? Will it even exist?

I ask this because I walked away from several conversations at the 2009 NADA Conference with a blurry vision of our future.

Listen, I think the F&I office is safe in the near-term. Heck, today’s credit crisis is proof enough of that. However, it’s also shined a light on a dealer’s need for cash flow and the need for dealerships to do more with less. That’s why, if you’ve been paying attention, there’s been some movement on the e-contracting front. (Click here to see what I mean.)

But here’s the deal: The need for cash flow also has automakers, lenders, and technology providers revisiting the age-old vision of a hybrid front-end. Only this time their vision doesn’t involve an F&I kiosk.

No, this time that vision involves an iPhone-wielding consumer using his or her wireless device to fly through the car-buying process with just a few clicks. In fact, that very scenario was described during a panel discussion at the American Financial Services Association’s 2009 Vehicle Finance Conference in New Orleans.

If you’re laughing at that possibility, here are five examples of why you shouldn’t:

Example 1: Hyundai’s Payment Assurance Program

Listen to how EFG Companies’ Jeff Beaver and Ricky Wolfe described the company’s WALKAWAY program, the payment assurance product that became a viral advertising sensation for Hyundai.

“The reason why we ever even began this venture was to enhance the value proposition of EFG Companies,” said Wolfe. “We’re a performance-enhancement company and we’ve made this transition from being F&I-only to differentiate us from the other companies like ours.”

Wolfe added: “We thought we needed to play sideline to sideline, so we made some strategic moves in terms of buying a CRM company, buying the licensing to Walkaway CANADA, which we thought at the time was a tremendous lead-generation tool. That’s the way we’ve seen it all along.”

Even companies advising lenders are saying payment assurance products shouldn’t be viewed as traditional credit insurance. Click here to check out this white paper from Computer Services Corporation (CSC), a technology solutions provider that works with lenders.

My take is this: WALKAWAY is a hybrid product. I mean, the 12-month, vehicle-return program Hyundai threw on the hoods of every financed or leased vehicle sure does sound like a sales generator. But the upgrades the program offers — full-term coverage, additional coverage for other out-of-work circumstances, and up to $15,000 in negative equity coverage — sure makes it sounds like a great upsell in the F&I office.

Example 2: Open Dealer Exchange

Not sure if you caught the announcement, but ADP and Reynolds are looking to bring a complete loan origination solution to the market under a new moniker — Open Dealer Exchange.

Pretty neat, right? Well, as I heard from Marty Zowan, a sales executive for ODE, the solution could, if a dealer wanted to, put the financing process right in the sales area.

Example 3: DealerTrack’s New Vision

Now don’t misunderstand me, as DealerTrack execs didn’t say the company was out of the F&I business. But the company did lay out a new four-quadrant view — compliance, DMS, sales, and inventory management — that didn’t include the letters “F” or “I.”

And listen to this quote from DT’s Mark O’Neil: “DealerTrack has historically been identified as a credit provider. The reality is today we’re a different company.”

As I said, DT isn’t forgetting about its roots. It’s just redefining itself to better reflect the moves it’s made in recent years.

Example 4: Allstate Credit Division Now Allstate Dealer Services

DT isn’t the only company making moves to more accurately reflect its operations. Allstate is doing the same thing. And listen to this quote from Allstate Dealer Services’ Tony Wanderon:

“The name Allstate Dealer Services reflects the transformation our business has undergone in recent years.”

Listen, I know this hybrid front-end picture has been painted before. The difference this time around is we’ve just been hit by an unprecedented crisis that’s making everyone rethink their business. Where that puts F&I, I’m not sure. All I say is we better be part of that evolution.

Look at me, I never really was a fan of blogs or bloggers, but here I am today.


  1. 1. Gerry White [ February 25, 2009 @ 04:49AM ]


    Good article. I could not access your piece on eContracting. The "page not found" notice appears. Please send me your comments or article on eContracting.


  2. 2. ProfitDrivers [ February 25, 2009 @ 07:18AM ]

    Gregory, there are changes imminent in auto land, that's certain. None of us have a crystal ball to predict how that will look. I think more than the F&I office changing it's appearance, the products the F&I manager offers will be improved and the F&I manager's role may appear like one of an advisor more than one of a salesperson. Kind of like an Investment Advisor. I have been an F&I manager in western Canada for 10 years and now work independently with novice and seasoned professionals in the career. With the credit squeeze we have experienced in the past 8 months, already the focus of an excellent F&I manager has shifted to one of a Financial Services Manager. I think we can all agree on one thing, the F&I office is a great profit generator with nominal overhead. It only makes sense to enhance that position with products that are indicative of the times, just as Hyundai's Payment Assurance Program has done. I can't imagine that the F&I office will function from an iPhone...these predictions forget that the fundamentals of any business are based on relationships. That just can't happen with clicks on an iPhone and during tough times like we are in, it is more important than ever to build relationships! Perhaps independent, portable F&I managers are in the future though...just like the auto insurance agents do here.

  3. 3. Josh [ February 25, 2009 @ 07:42AM ]

    I would be very interested in knowing more about all state dealer services. I just walked next door to the Allstate office building that my boss owns, the employees didn't know anything about this? The young lady that works there gave me a number to allstate bank, they didn't know anything about this either.?

  4. 4. Marv Eleazer [ February 25, 2009 @ 09:46AM ]

    From the desk (and perspective) of an old F&I horse I must take issue with a few points here. I appreciate your studious examination of some of the opinions and marketing trends vendors are trying to forge as the market endures and our patience is tested however, I fear the direction they may be heading is one that is uncharted and possibly rife with peril. I respect Jim Ziegler's statement and his philosophical point of view is correct in that this business is evolving to keep pace with technology but the way a car is sold probably isn't going to vary much in the coming years.

    The WalkAway product being offered by Hyundai is a terrific product and certain to be well accepted by customers who fear job loss especially in this market. Hyundai needs all the help it can get and I'm certain FIM's in those stores will welcome the addition as a great profit booster though I doubt the product will catch fire among the other captive finance arms. Time will tell.

    ODE sounds like another attempt to bolster the desking process and further remove the F&I process from the mix if the dealer chooses to do so. With front end margins at an all time low and the recent statistics that F&I income contributes more than ever to the bottom line it seems ludicrous to put that process in the hands of the sales department who is already battling the customer on the cost of the car.

    Greg, you've pointed out the need to do more with less is more apparent now than ever before. Having said that I submit that the need to direct traffic to the F&I office and keeping the process in the capable hands of professionals and further away from the sales staff is paramount. The dealer has more at stake in the F&I office than on the

  5. 5. Gregory Arroyo [ February 25, 2009 @ 11:12AM ]

    Gerry, the link is fixed. However, the link is to a news story about BofA being the first non-captive finance company to join RouteOne's e-contracting platform. However, we'll be doing something on e-contracting in May. And thanks PD and Marv. I agree with you. I just think we as F&I people need to make sure we're in those conversations. We need to express why the F&I manager needs to be in the process, no matter what. And truth be told, many of the companies I talked about didn't see F&I managers going anywhere in the short term. Heck, we're probably facing one of the worst years as far as regulatory threats in our history. Make sure to check out the March issue to see what I mean. As you'll read, people talked about inventory management, creating better Websites, technology, technology. However, my conversation always ended with my interviewee saying this will really be the year of the F&I manager. Why? Compliance is going to be huge this year. However, compliance, and the need for it, will be driven by lenders. They don't want to take anymore losses, so they're judging whether they're going to do business with you based on the checks and balances of your F&I process.

  6. 6. Julie [ February 25, 2009 @ 08:28PM ]

    I still believe that regardless of "HOW" the consumer visits his vehicle purchasing and paying for options, some fragment of the F&I process will be relevant. Being a 19 year vetern in my dealer group and witnessing "process" alignment between both domestic and import lines, there is still and will be a need in the forseeable short or long term process for the F&I specialist. Will our title change, perhaps, our job descritption, for sure it will...but there is no way in the next 20 years the end funnel will be all point and click. The transfer of ownership of a vehicle will still needs people. And PEOPLE, savvy lenders and technology providers will know are the glue to the edges of a car deal. Compliance if anything will aided by techonolgy advances, but a kiosk will not effectively explain the benefits of gap, road hazard tire programs, and the sacred service contract. I am not a youngin, I remember no bureau scores on credit reports and using fax paper that came in a curly chemical smelling roll, and yes we have evolved to all sorts of goodies like firstlook, dealertrack, routeone, but at the end of it is ME, and I firmly beleive the manufacturers want me, at the sale consumation saying, the CAR existed, the PEOPLE were there, and signed in front of me.

    Most people still need help at the new "checkouts" in grocery stores to scan and pay for their O.J. and bread peopleless, I don't think the vehicle buying and I stress this part PAYING FOR process is headed that way anytime soon...However, I think F&I people will be doing more vehicle selling or salespeople doing more F&I, and I put my money on F&I people standing at the end, not car salespeople. I am currently not glued to my chair, and more than ready to walk someone over to service for help or to parts for more info. Thats how I see it!

  7. 7. Mike [ February 26, 2009 @ 08:36AM ]


    We feel that the name Allstate Dealer Services more accurately reflects how we operate and have evolved over the years. The majority of our business comes from auto-centric products such as guaranteed asset protection, vehicle appearance protection, and roadside assistance. The addition of our new vehicle service contract product in early March will only solidify our position as one of the leading providers of automotive products to agencies and auto dealers. Moving forward, we believe this re-branding will help give us a renewed focus and determination to help our agencies and dealerships succeed in today’s market place. If anyone has any questions regarding our name change or any of our products, please don’t hesitate to email me at Thanks

  8. 8. Frank [ February 26, 2009 @ 12:08PM ]

    Toyota has done the kiosk sell with there Scions for awhile..The prices of car and options are all on line.The price of backend products are there also..It is a one price deal and took off well with the Y generation.The idea that all is known up front is important to them and they seem to like the idea of same price wherever you buy.

  9. 9. Greg [ February 26, 2009 @ 12:54PM ]

    Good point Frank. Actually, that iPod-wielding-customer scenario I described came during a panel discussion that included a rep from Toyota Financial. And if I'm not mistaken, I think it was that rep who described that scenario.

  10. 10. Brooks [ February 27, 2009 @ 10:46AM ]

    Good points Greg. There are a bunch of new products on the horizon. This Hyundai walk-away is a great idea. I spoke with Hyundai dealers and they are getting the line-share they did not before. We have to align ourselves for this type of promotion so we dont get left in the dust.

  11. 11. Jacques [ March 01, 2009 @ 06:22AM ]

    Many have tried that pure price thing in the past, like MB. It failed horribly. Look at saturn, and you can even look at Scion. Scion took off well with the Y-generation probably becuase they were the only ones who knew how to work these machines to order the cars. =) J/k. Scion was targeting Gen-y'ers and that generation happens to be the most tech-savvy to date, the combination made it successful but I think much of its sales have died out.. Bottom line, people still LOVE to negotiate, they want to know they're getting a good deal, and they want something for being loyal to a brand. Not the same price anywhere they go and then to another make who's going to offer a better price on a comparable product. Another thing to note, What about the test drive and personalized walk around? Yea, iPOD technology is amazing, but you still can't test drive from there. I really doubt at this time, folks are just going to pop onto their iPhone and say "Lets order a car", the personalized sales process will persevere, but I don't doubt technology will have a bigger role than now in automotive sales in the near future, It just WON'T replace it.

  12. 12. STEVE ROSE [ March 05, 2009 @ 07:22AM ]


  13. 13. HARRY ACKERMAN [ March 12, 2009 @ 07:48AM ]


  14. 14. Asim [ March 12, 2009 @ 03:05PM ]

    My vision of the F&I office in the future; will it even exist?

    Without a doubt, it will exist, as an even more critical part of the business. Perhaps there will be more technology such as touch screens for the customer, signature pads for contract execution (well, these technologies exist today, they are just not in widespread usage for F&I offices). I see the transaction, including disclosures and product feature / benefit presentations being completed on a screen. I envision laser printers printing all the final documents in one dump, eliminating multi part forms and dot matrix printers...

    But most of all, I see today's F&I professional as being a key in this all. Trained, professional, compliant, ethical business managers are vital to the smooth operation of the sales department. We all need to be ready to evolve, but there is no need to be concerned that F&I offices are going to be reduced to paper shuffling centers. For those of us who view our F&I practitioners as professionals, we will find that they will be an important part of our process for a long time to come.

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