IRVINE, Calif.— As digital retailing becomes more and more prolific, Kelley Blue Book Analyst Alec Gutierrez suspects that profits will shift away from the sale of the car and into the F&I office.

Sites that allow customers to price shop have become a normal part of the car-shopping experience for consumers. This new normal, Gutierrez said, is forcing dealers to price their cars competitively in order to stay in the game. He added that vehicle OEMs are keenly aware that consumers are cross-shopping and triangulating across sources. It's why the KBB analyst believes profits made in F&I will be critical going forward.

 “As digital retailing takes more of a foothold — as consumers are better informed in terms of what they should expect to pay at the dealership, what they should expect to receive for their trade before they walk through the door — I would suspect the profit centers of the dealership to shift more and more into the F&I office,” Gutierrez said.

In the next two or three years, Gutierrez said he expects the majority of dealers to offer consumers the ability to buy directly from their website, through a third party or both. And while he also believes only a small percentage of consumers will take advantage, he does expect consumers to use these evolving dealer sites to complete some portions of the vehicle-buying process.

“Some, say 5% or less, will shop online from start to finish and opt for at home delivery or similar concierge solutions," Gutierrez noted. "Others will submit a credit app, get an appraisal on trade, perhaps negotiate online to some extent, and then choose to head to the dealership to test drive, sign docs, and take delivery."

And the more they do, Gutierrez said, the more F&I will benefit. “When you’re not focused on getting the right price on the purchase or trade, you’re a little more open to spending time on the test drive, understanding the value of the car and ultimately understanding how to protect that car with [a service contract] and other products in the F&I office,” Gutierrez said.

Gutierrez noted, however, that he doesn't expect product pricing to appear on most dealer websites anytime soon. “As far as F&I prices being listed online, I believe some dealers are headed down this path, but not most," he said. "I think we will see more and more transparency in terms of dealers providing available F&I products online, but pricing will likely not be made available in the near term."