Specialty Administration Services’ Rob Davenport shares where he thinks new opportunities will arise in F&I. - IMAGE: Getty

Specialty Administration Services’ Rob Davenport shares where he thinks new opportunities will arise in F&I.

IMAGE: Getty

Rob Davenport, executive vice president of Specialty Administration Services (SAS), is no stranger to F&I. He first dipped his toes in the F&I waters in 1994 with Pat Ryan & Associates and he’s never left the field. Over his nearly 30 years in F&I, he’s seen the industry go through its share of difficulties, but the pandemic and current automotive inventory shortage are among the most unique. 

Davenport reports the pandemic upped consumers’ understanding of risk and their risk tolerances. The change generates higher interest in F&I products and represents great opportunities for dealers that take advantage of it. 

Boost F&I Sales in Commercial Trucking Dealerships

There are many ways to tap into this heightened consumer interest, he says. Among them is improving F&I sales in the heavy-duty and mid-size truck markets. Dealers with commercial trucking stores, he says, offer few F&I solutions for their customers. 

“We are positioning SAS for this space,” he adds. “It’s nearly impossible to find an agent whose customers are 100% commercial truck dealers. Our Truck Master Warranty is a great niche product for dealers with a medium-duty or heavy-duty commercial store who don’t have a service contract or gap program to offer.” 

SAS hopes the new program will add a few more arrows in the quiver for medium-duty and heavy-duty dealers. He explains, “Heavy-duty and commercial stores are not always as advanced in F&I processes as automobile dealerships. Many of them don’t even have an F&I manager. It presents some unique challenges.” 

There are many reasons for the difference. First, he says, sales numbers in commercial dealerships are lower. An automotive dealership might sell 500 vehicles a month, versus a commercial store that sells 10 trucks a month. And, often, their customers lack awareness about F&I products. 

“There is an opportunity for dealers to grow this space,” he says, noting heavy-duty truck repairs cost anywhere from $3,000 to $35,000.

“The average repair and resulting downtime can easily put an owner-operator out of business. Our products work to prevent that from happening,” he says. “There’s a need to educate customers about available products and how they will benefit them.” 

Educational structures must change at the dealer level. Here, the commercial dealership can steal a move from the automotive sector, which presents F&I products to every customer. “Every customer gets presented the extended service contract, gap coverage, tire and wheel protection,” he says. “The heavy-duty truck sector doesn’t always do that. Somehow, we need to commercial truck dealerships to view F&I as a profit center. They must consider the profit they can add to the deal through financing and service contracts.” 

Digital Dealerships

The automotive industry saw a shift to digital retailing during the pandemic. Dealer impact surveys by Roadster and NADA over the past year report that around 86% of automotive consumers do at least part of their transaction online and 89% of dealers offer a digital retailing solution.

Digital retailing offers tremendous opportunity for commercial stores and automotive dealerships alike, Davenport says. “I don’t think we can close that door now. I think that’s what customers wanted, so these advancements will keep happening. We have learned we can do so much by computer and by phone, and that we function well remotely. I think that will continue. Consumers want to do much of the transaction process online.” 

Zoom presentations, electronic contracting processes and more will become a way of life for both commercial trucking and automotive dealers, he says. 

Digital sales also offer a platform for better and earlier presentation of F&I products, he says. “It enables customers to get more of the information on their own, rather than having the pressure of someone sitting in front of them,” he says. “I think this will help sell these products.” 

The dealers that package their F&I products online with nice electronic presentations that explain tire and wheel products, gap insurance and vehicle service contracts send out a positive message. Being transparent, he says, can translate into greater sales opportunities. 

Introduce Products Earlier

“You have got to talk about F&I earlier,” Davenport stresses, “whether it’s through a salesperson or an F&I manager. But it makes sense to introduce some F&I products as you introduce the vehicle to get people thinking along those lines.” 

F&I managers will have greater success, he adds, when they employ consultive selling. Ask consumers how long they keep vehicles and how many miles they drive a year. Consider where they live and whether they have pets or children. And ask them what happened to their previous vehicle to learn about their driving habits.

“That information will direct the F&I products you throw their way,” he says. “It forces you to find out things about customers before you try to sell anything.” 

Davenport envisions the traditional sales model that separates F&I sales is here to stay. “You need a specialist who knows F&I products to sell them,” he says. “It would be tough for one salesperson to know everything about available vehicles and F&I products. I think they will do the handoff differently though. Sometimes the hand off will be electronic to make the process more efficient.” 

The current inventory shortage will require dealers to get creative and develop new revenue streams, according to Davenport. 

“I think we’ll need to be more creative in the products we offer through the finance office,” he says. “That’s where the revenue opportunities will come from. You will always sell vehicles, but the real profit opportunities will come on the back end. I think the industry will develop new F&I products to provide those opportunities.”