Are advancements in auto retail technology helping or hurting the role of F&I managers?
Lexus of Lehigh Valley's F&I profit per new vehicle jumped to $1,150 in 2016 after it eliminated the traditional F&I manager position, compared with less than $700 the year earlier. The Pennsylvania store credits the PVR boost to its adoption of Lexus Plus, a no-haggle pricing model introduced by the automaker in 2016 that also calls for a customer to work with a single point of contact at the dealership.
"In this new approach, from the very beginning, the customer knows that everything is pre-discounted and all of our prices, rates, payments, trade values are right upfront," said Mike Price, the dealership's director of variable operations. "Everything is transparent because the customer can actually sit next to the sales consultant and work together in what cars fits their monthly payment."
Lexus of Lehigh Valley also implemented an in-store and online buying and financing platform by dealership technology startup Roadster. That has increased its Internet sales closing rate by 9 percentage points.
With the Lexus Plus strategy and digital retail technology, such as Roadster's platform, Price believes that customers could go through the process on their own if the consultant handed them the keyboard. So why don't they?
Some customers likely want the entire process to be in their hands, but no matter how easy it is, many customers seem to want a guide.
A car is the biggest purchase many consumers will ever make, and as loan terms lengthen, many customers have more than five years between vehicle purchases.
Consumers have shown that they want more control over the process — technology will empower that. But still, diving into the car-buying experience on their own can be daunting.
F&I managers have the necessary legal know-how and lending savvy to work with banks to finance customers with a wide range of credit histories.
The role, even if its title changes, will likely continue to be essential to car buying, but the right technology, when used correctly, will probably help F&I managers — and consumers — more than it hurts them.