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Embracing Online Auto Retailing: From Start to F&Inish

Online auto retailing is here, it’s vital, and it’s valuable — This expansion has to include evolution in the online F&I presentation to ensure the full scope of revenue opportunity is being captured.

by Michael LaMotta
December 22, 2020
Embracing Online Auto Retailing: From Start to F&Inish

Online auto retailing is here, it’s vital, and it’s valuable — This expansion has to include evolution in the online F&I presentation to ensure the full scope of revenue opportunity is being captured.

IMAGE: IPOPBA via Getty Images

4 min to read


Auto retailing is retailing, period. Once the pandemic hit, online shopping went through the roof for industries far beyond clothing and groceries. Auto sales made a dramatic shift while dealerships were shuttered during lockdowns across the country and shoppers turned to the internet in droves. According to CarGurus’ June 2020 COVID-19 Sentiment Study, 60% of respondents indicated they were open to buying a car online, while just 32% were willing to do so before the COVID-19 pandemic.

Online auto retailing is here, it’s vital, and it’s valuable.

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Has this shift meant a magical transition to seamless digital sales across the industry? Certainly not, but the trend is moving in the right direction, with more retailers shaping their strategies to move from simply using the internet as a tool to bring people into the dealership to truly offering a comprehensive virtual sales experience. In this moment of seismic change in the retail environment, it’s critical to understand that brick-and-mortar days aren’t necessarily over — but to stay relevant and competitive, physical dealerships require expansion to include a digital storefront as well.

This expansion has to include evolution in the online F&I presentation to ensure customers are being offered a full range of services and that the full scope of revenue opportunity is being captured. Unfortunately, it took a pandemic to bring us to the inevitable, but here we are. Taking an entrepreneurial approach, and following the example of those who are leading the charge, is a great place to start.

Now is the perfect time to:

  • Evaluate your online capabilities. Do you have efficient and scalable e-commerce functionality? Do you have the staff or professional resources to build and manage your online offerings?

  • Educate yourself on best practices. Make a careful study of your competitors or those in the industry that have successfully shifted to digital retailing. Carvana is one resounding example: It reported second-quarter revenues of $1.12 billion and nearly 56,000 units sold, an increase of 13% over 2019, with the number of cars sold up 25% year over year. What is it doing right and how can you translate some of its best practices to your structure?

  • Partner wisely and train thoroughly. Invest in digital retail tools that are integrated with your CRM and website, and test for user experience improvements. Simplify and make the digital retail process consistent for all customers, providing sufficient training and documentation to your sales and BDC teams.

While this evolution may be a dramatic change for your business, you don’t want to be left behind the pack that’s charging ahead in the digital race. You also don’t want to leave revenue on the table. Just as you wouldn’t finalize a sale without offering F&I options to a customer in person, you’ll want to integrate digitized menu selling seamlessly into your online offerings. Keeping in mind that in-house sales are not vanishing either, carrying this optimized customer experience into the back room is critical as well because these interactions will continue to be shaped by the need for a streamlined, efficient presentation to minimize time and contact.

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But in this area, it’s about much more than just automating the conversation around protection products, extensions, and add-ons. This is where harnessing the digital aspect of your platform can make an eye-popping difference.

Look at some of the top digital retail solution providers in the industry for example. The F&I presentation software they offer have been adapted successfully by some of the largest and most prestigious automotive groups in the country because they go well beyond replicating the exact same presentation that a dealer may have been using for 20 years. These tools utilize big data and predictive analytics to create a tailored presentation based on the overall deal, vehicle, and financial situation for each customer. Pair power like that with a service contract provider and administrator committed to helping you build wealth through best-in-class F&I products and you’ll take your digital strategy way above the next level.

Once you’ve hit all the marks in developing your online presence, amp up your marketing to make sure people know about it. Hit social media and make good use of customer data you already own to spread the word through email outreach or whatever works best for your brand.

Online auto retailing is here, it’s vital, and it’s valuable. The best time to get started was yesterday. Don’t waste another minute.

Michael LaMotta is CEO of Dealer Owned Warranty Company, which he founded with lessons learned from almost 30 years of automotive experience, many of which spent as a car dealer and almost a decade spent on F&I administration. DOWC offers customizable F&I products and expertise in compliance, as well as a full suite of technology designed to optimize productivity and expedite claims adjustments, processing, and reporting.

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