3 Ways to Sell More F&I to Millennials and Gen Z

While millennials and Generation Z consumers might be known for getting more excited to shop for shiny new smartphones than shiny new cars, younger Americans are making significant moves into the car-buying market.

In fact, according to new research from MIT’s Center for Energy and Environmental Policy Research — which factored in variables like income, city vs. rural living, and marital status — millennials drive 2,234 more miles per year than comparable baby boomers.

These younger generations demand more speed and transparency than any other cohort before them. F&I managers must take note of these demands and adjust accordingly in order to better serve these younger car buyers — without compromising the quality or integrity of your offerings.

Here are three ways you can take action today:

1. Manage Expectations About Timing.

Gen Zers and millennials have grown up with two-day online shipping and access to all the world’s knowledge in their pocket. This might make it harder for them to understand that finding the right F&I products for their new car takes time.

Communicate this reality at the beginning. You will eliminate any later confusion and create a better customer experience. And if you are presenting the exact same F&I menu to every buyer, consider narrowing the choices. This is far more effective than offering the full, dizzying array of options. The 300% rule only applies to products that offer some benefit.

2. Be Transparent.

Millennial and Gen Z consumers demand transparency, so it’s crucial that F&I managers cater to this as much as possible. Are your F&I options made clear to customers? Is an overview of your offerings available on your website? Is your menu provider up to date?

Although pricing for F&I products can change depending on vehicle type, driver habits and other circumstances, the important details and benefits should be crystal clear.

This push for transparency can be nerve-wracking for dealers and general managers. In the F&I box, the key is emphasizing value while being upfront about price.

For example, have you told the customer everything there is to know about their new vehicle service contract? If the customer doesn’t understand the value you provide, they will decline or look elsewhere. Make the customer’s experience about more than just signing on a dotted line and hoping for the best.

3. Diversify Your F&I Department.

Millennials and Gen Z are the two most diverse generations in U.S. history. The auto industry has a lot of work to do regarding diversity, but management can take steps to ensure your team gets it right.

It starts with your hiring process. Be sure whoever makes hiring decisions at your dealership is given extensive training in identifying and counteracting their own unconscious biases. In the F&I department, bias is heavily scrutinized. Are you making biased assumptions about who can afford your products and who can’t?

An important (and often overlooked) factor to consider is age diversity. Are younger employees given an opportunity to prosper, and move from entry-level jobs on the sales floor to the F&I department?

Lay out a career path so those younger individuals feel like they’re on a journey rather than a hamster wheel. After all, it will be easier to close a sale with a 25-year-old car buyer if your F&I team includes people who look more like peers than parents.

There are plenty of exaggerated stereotypes about millennial and Gen Z customers, but ultimately, they respond to the same great service that your customers of all ages demand. It’s important to cater to their preferences without overcorrecting and jeopardizing the integrity and trust that your dealership was built on.

Patrick Hennessey is the national training director for Ally Insurance, where he works with dealers to strengthen F&I operations and staff development. Contact him at [email protected].