F&I is still navigating through some post-recession market challenges. That reality took center stage during the executive panel session at the magazine’s annual conference, as did the need to expedite adoption of technology.
“The industry is being dragged along kicking and screaming, but technology is actually enhancing the process,” said Charlie Robinson, president of Resource Automotive.
Moderated by F&I and Showroom’s Gregory Arroyo, the panel also included Stephen Amos, president of GSFSGroup; Bob Corbin, president of IAS; Dave Duncan, president of Safe-Guard Products LLC; and Kelly Price, president of National Automotive Experts.
It was a productive panel. The group tackled e-contracting, the apparent increase in cash deals earlier this year, leasing’s resurgence, the used-car market and the improving health of auto finance.
Amos said that despite gains in dealer adoption of electronic rating and contracting capabilities, usage isn’t where it needs to be. “We’re spending the money on it to be more accurate and user friendly,” said Amos, adding that e-contracting represents a cost, not a revenue stream for providers.
As for whether e-commerce and other technologies can drive F&I into the virtual world, Price said: “I think it’s going to be pretty hard to replace a qualified, educated and informed individual.”
Arroyo asked how the industry was responding to the pickup in cash deals and leasing’s resurgence. Panelists said that F&I offices were forced to focus on shorter terms and lower priced products. IAS’s Corbin said his dealers had begun bundling high-value, low-cost products, and Price added that preloading product — offering 12 months of complimentary coverage — was another response to those trends.
The resurgence in the secondary market also was addressed. The industry continues to face a used-vehicle supply problem amidst a great deal of pent-up demand. “We’re scrapping 12 million units and selling 12 million units, so auto dealers have an extreme challenge,” Robinson said. “The biggest obstacle is getting inventory; never mind getting the right inventory.”
On the upside, auto finance guidelines are loosening. Sources are not only buying deeper, they’re accepting deals with higher loan-to-value ratios. “If we’re comparing the F&I market to 2006 and 2007, it is more challenging,” Duncan said. “But compared to the spring of 2009, we’re in a lot better shape. F&I product advances are becoming less of an issue.”