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F&I in Digital Retailing

Updated: May 10, 2021

F&I Is The Holy Grail of Digital Retailing

Business has been up for digital retail vendors since early 2020 when COVID-19 struck. But consumers still cannot buy a car online today. We know that this is what many customers want. So what is holding back the industry from selling a car entirely online?

The answer? F&I.

In 2018, I coined F&I the holy grail of digital retailing. More than two years (and a global pandemic) later and this label is still true as ever.

In the August edition of the Automotive Ventures Newsletter, Steve Greenfield defined his perspective in “What is Digital Retailing?”

In two of the three use cases Greenfield identified, financing is a critical component. But consumers today, even with digital retailing vendors in place at dealerships, cannot apply online for an auto loan or lease and get an approval from the dealer, including all terms and conditions.

Here’s why this functionality is not mainstream in the automotive industry today:

  1. Dealers do not want it. Traditional F&I Managers often want to keep the customer in the dark until they are in the “box” at the dealership. Lender decisions are sent back to dealers electronically, but not in a format that can be presented to the consumer. Even if they were, most dealers today do not want to provide the consumer an online approval message, don’t want to provide the consumer a rate, and would rather use the finance portion of the deals as lead generation to get customers into the showroom.

  2. Credit application responses are not formatted for easy sharing with consumers. Many digital retailers allow consumers to submit credit applications directly to Route One or DealerTrack. Both vendors offer an option to provide the consumer an online response to credit applications but it requires normalization so it can be easily digested and understood by consumers.

  3. An online F&I menu relies heavily on AI that has yet to be developed. For most in-store F&I Menu presentations, the F&I Manager presents a high-level description of products on the menu and verbally sells the features and benefits to the consumer. An online transaction does not have the luxury of having a human presenting the benefits, which means some form of AI (Artificial Intelligence) must be developed to present the most thoughtful F&I Menu to customers.

  4. Product ratings must be real time and dynamically updated. F&I products and the vast coverage options the providers have assembled can be complicated. A static price for many products is not accurate, for example, and the price on a Vehicle Service Contract cannot be set the same for all cars. The F&I products presented online need to be electronically rated with the product provider and include dealer specific rates and price.

  5. Online digital media explaining F&I products is in the early stages of development. Very often, when an F&I Manager is making a product presentation, they have brochures or other sales aides to physically show to the consumer. When purchasing a vehicle online, consumers are not looking to download a PDF brochure to get the product information they need; they are looking for online digital media and content that is engaging. Most of the F&I product industry is in the early stages of providing new digital media about their products for digital retailers to provide to the customer to develop engaging online F&I product presentations.

Does anyone really think that the F&I process will always stay in the 10x10 office? Consumers are demanding more information and transparency. Research has shown that if a consumer spends time educating themselves about F&I products prior to going to the dealership, there are equal or greater product sales. And consumers are beginning to expect transparency relative to F&I products just like they expect transparency on the price of the car. Digital retailers who deliver this will be included in the customers’ consideration set.

Interested in learning more? My newsletter next month will focus on digital retailing related to F&I, including outlining specific functionality by various Digital Retailers as well as my recommendations for the industry. Visit to join my mailing list.

Brian Reed is the founder of Digital Auto Advisors. Brian has demonstrated success as an intrapreneur as well as an entrepreneur from Fortune 500 companies to start-ups. The common denominator has always been understanding business/customer issues and then using innovation, creativity, and technology to solve complexity. The past 10 years has been solving problems relative to the processing of F&I aftermarket products for F&I administrators, dealers, lenders, agents and Digital Retailers. You can contact him at

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