Anti-Consumer, Me?

It was novelist and Miami Herald columnist Carl Hiaasen who wrote, “When you’re given a newspaper column, you’re not being paid to sit on a fence and scratch your chin and say ‘On the one hand this’ and ‘On the other hand that.’ You’re getting paid for your opinion.”

I admit I’ve been doing a little too much chin-scratching when it comes to this digital F&I discussion. As a journalist, my job is to present all arguments and concerns, and then let you decide where you stand. Well, reaction to my comments in last month’s editorial has forced me to clarify my stance. However, when you’re done reading, you may find that my opinion is still snagged on that pesky fence.

First, I need to apologize, because my comments did fail to recognize that companies pushing this digital agenda have been at it for more than two decades. In fact, during the panel discussion I wrote about last month — the P&A Leadership Summit’s “Presenting F&I Products Online” session — Daniel Lievrouw of American Guardian Warranty Services shared that he completed an online vehicle purchase back in 1999. It was the “best F&I dealer experience” he ever had, he said, although he admitted he didn’t buy any product.

“We had the same discussions that we’re having now on how is that gonna revolutionize the auto industry or how it is going to cripple certain aspects of it,” he said.

A lot has happened in 17 years. And I think tech companies have a real bead on what it takes to turn internet shoppers into buyers. I know this because every ecommerce platform I’ve demoed — from Cox’s MakeMyDeal and Pearl Technologies’ ShowroomXpress to Drive Motors and Roadster — operate under the same objective: help car buyers arrive at their desired payment.

Yes, they do it in different ways. Some use prescreen and prequalification technology, some allow buyers to negotiate their deals online, and others allow consumers to shop for vehicles based on finance offers. But it’s their ability to add F&I products to the deal that has made them a hot topic in our industry.

I know the long-held belief is that you don’t pre-expose consumers to products before the car is sold. But I’ve met plenty of F&I pros in my 10 years with the magazine who don’t see that as a problem. Besides, if we can turn disclosure requirements like the Risk-Based Pricing Rule into selling tools, I’m sure there are enough bright minds in this industry to come up with a response to a customer who says, “Thanks very much, but I did go online and I did look at everything, and I’ve decided I’m not interested.”

Pricing, however, is a different story. And that’s why I described that “Presenting F&I Products Online” discussion as a historic moment in last month’s editorial, because the F&I industry hasn’t had its TrueCar moment. And, well, that discussion offered stakeholders — from software makers and product providers to F&I pros — an opportunity to state their case.

Hey, you can’t be a disrupter without getting pushback, right?

And think about this: Regulatory insiders have warned for at least three years now that the Consumer Financial Protection Bureau is preparing to target F&I product pricing, yet we’re still debating whether to adopt standardized pricing. Some providers have issued guidelines to their dealers, and some dealers have established caps, but we have yet to mount an industrywide response.

So how can you expect consumer studies to do what this regulatory threat hasn’t done? I will say this argument that consumers will self-close themselves on add-on products like they do with AppleCare and on Amazon.com is compelling. However, there’s a big difference between a $99 AppleCare plan and a $4,000 service contract.

As for me, I’m for posting product information online. In fact, a year before vAuto’s Dale Pollak and MakeMyDeal founder Mike Burgiss met at the 2013 NADA Convention & Expo and sketched out on a napkin the foundation on which Burgiss’ online deal-making platform was built, I used this very page (“Under Construction,” February 2012) to call on F&I pros to use their dealership’s websites and social media pages to educate customers about their processes and ­products.

As for pricing, well, I don’t have enough skin in the game for my opinion to count. But maybe that’ll change when I see the companies pushing for transparency post pricing for their solutions on their websites. But here’s what I will say: Having made this digital push the subject of six of the last 10 cover stories, I look forward to profiling that dealer who successfully takes that digital leap.