StoneEagle F&I’s Joe St. John shares how capitalizing on the digital landscape and new industry trends can help dealerships expand their services and better meet consumer needs. - IMAGE: Getty Images

StoneEagle F&I’s Joe St. John shares how capitalizing on the digital landscape and new industry trends can help dealerships expand their services and better meet consumer needs.

IMAGE: Getty Images

Automotive industry changes are making heads turn. New patterns have emerged never seen before in history. 

The digital world is increasing, more data and information is becoming available, and the car deal landscape is changing in more ways than one. The fundamental principles of how to influence consumer behavior are still the same, although how dealerships deliver and meet their consumers are shifting dynamically. 

As head of Business Development at StoneEagle F&I, Joe St. John sits at the pulse of this period of rapid change. He sees the latest industry trends as they emerge and identifies future opportunities for dealerships in this novel consumer environment. 


St. John shared his insights and expertise at the Agent Summit event on August 30 via a seminar titled The Digital F&I Window.” As a dealership-supporting provider that serves over 15,000 dealerships, St. John uses StoneEagle’s data to uncap industry trends and deliver insight into advantages that dealerships have amid rapid industry changes in an increasing digital landscape. 

“According to NADA, in 2018 less than 5% of dealerships displayed digital information on their websites. Today, it’s greater than 90%,” St. John explains.

As St. John points out, technology and data are at consumers’ fingertips, and they are using this to their advantage when making car deals. Dealerships can use this shift to their advantage, too, by upping their digital game. When dealers make more data available to consumers online, people express more interest in F&I. They use online tools to look at their own car deal, research options, and figure out what products are available that best fit their car purchase needs. 

People are making car deals online from the comfort of their homes, office, and phone, instead of at the showroom, according to St. John. Tie in emerging car retailers, such as Carvana and Vroom. Now customers have a plethora of options outside the dealership. Today, dealerships have a new opportunity to meet customers and address their needs from a new landscape, which also presents new challenges. 

One of the biggest challenges within the industry right now is the massive disconnect between what market pressures and consumer sentiment indicate versus the realities that are driving opportunities. Therefore, St. John and StoneEagle look for ways to help dealerships leverage critical data insights to drive growth and profits.  “Your opportunity to deliver value is greater than it’s ever been because the dealer’s world is changing at a faster rate than ever before, which means dealer values can add into that ecosystem,” says St. John.

St. John looked at the analysis created when generating StoneEagleMetrics data for over 6,400 franchise retail automotive stores. Because it can be viewed month-by-month and region-by-region, a focused look at analysis of the 25,000,000 car deals processed from those dealers between January 2019 and August 2021 reveals insights that are counter intuitive to what we may guess absent real statistics. This proves out the importance of analyzing data to recognize the latest industry trends so dealerships and product providers can capitalize on market fluctuations and consumer behavior opportunities. 

New vs. Used Car Dynamics 

With all the news about chip shortages our instincts may tell us we should be seeing more used car sales than new. When St. John reveals the data we can see how the dynamic between new and used cars has changed.

Prices for used cars are at a record high. One factor causing this spike points to how dealers compete with rental car companies for used cars at car auctions. Not only are rental cars not supplying used cars at auction as they once did. They are now purchasing cars, too. OEMs also are contributing. Auto manufacturers provided lease extensions for customers during COVID. This means that customers are not resupplying used car inventory either. 

Data shows the volume of sales has skyrocketed since January 2021, with more new cars being sold compared to used cars on average every month. The total gross in the U.S. is higher than ever before, with an average front gross of $2,353 between both new and used. Back in 2019, the average was $500. Dealerships are used to losing money on the front end of selling new cars, but now new cars are making more money on the front end, he says. 

“So, we have dealerships paying more for cars than ever before; manufacturers offering fewer incentives than we’ve ever had, and yet, we are selling more cars. It defies all logic,” St. John explains. 

New Value Propositions

New value propositions have emerged to provide dealerships with a unique opportunity to increase product attachment rates on used cars. The opportunity is favorable when looking at data on products per deal (PDD), which is the highest it’s ever been in new and used cars alike. Dealerships can maximize this trend by increasing their focus on offering F&I products to used car buyers versus mostly offering them on new cars. 

Also, vehicle service contracts (VSC) penetration has increased to 46% compared to under 40% in January 2019, and StoneEagle’s data show VSC penetration is running higher on used cars (over 50%) versus new cars (42%). Dealerships can use this change to their advantage by capitalizing on used car efforts, St. John notes. 

Financial Opportunities

From a financial perspective, net profitability for dealerships has been the highest it’s ever been. According to StoneEagle’s data, auto lending is the second largest consumer asset class (outside of student loans) with a record-breaking 1.42 trillion in auto lending. 

St. John shares the average amount financed in vehicle purchases has increased as well since January 2019. For new cars, the average amount financed has grown from $32,500 to $37,700, and for used: $21,800 to $29,000. Currently, auto is the second largest credit consumers hold; it’s one of the best times for lenders to deliver deals to their customers. 

Capitalize on Opportunities

To conclude his seminar, St. John leaves dealerships with a few thought-provoking suggestions. The StoneEagle data proves that F&I products are bringing value to consumers and an ever-increasing opportunity for dealers. Industry data is showing consumer appetite for F&I consideration is moving upstream in the car deal. Because of this, dealerships can offer new value and differentiating factors when they meet consumers throughout both the car deal and service lane process. 

These changes make it critical for dealerships to educate and train all employees, not just F&I managers, to understand the F&I questions consumers may ask earlier in the process. 

St. John also recommends that dealerships seek out available digital opportunities. This includes reviewing digital marketing strategies in comparison with F&I numbers. By capitalizing on the digital landscape and new industry trends, dealerships can expand their services to better meet consumers’ needs, he says.

“I think service right now is by far the biggest opportunity set to differentiate yourself in the F&I game. That’s why we are investing heavily in delivering solutions that empower dealers and agents to leverage this same approach to data to accelerate profit growth in fixed operations” St. John says, sharing that StoneEagle plans to release service lane-oriented insights soon.

Ronnie Wendt is owner of In Good Company Communications and an editor at Agent Entrepreneur.

READ: How to Sell Your Business