COVID-19 and Beyond: How the Coronavirus is Changing the Auto F&I Sales Industry

We are living in incredible times. The arrival of the Coronavirus to American shores has shaken us to the core. Businesses both small and large are being impacted on an unprecedented scale. Never before have we seen what we’re seeing in these days, with thousands of businesses closing their doors in an effort to slow the spread of disease—including auto retailers. But not all dealerships playing ball, and there are some out there boasting they’re selling between 35 and 40 vehicles per day! Is this heroic, or unethical?

Did we ever really believe the Coronavirus would hit our shores as fast and explosively as it has? Certainly many of us, auto dealers included, refused to believe it would happen and that they would be faced with closing their doors at least for the time being. Those who have been playing it safe, trying to strike a balance between health concerns and the very real need to keep the economy moving. Where do we draw the line?

Recently, President Trump announced he will review the full spectrum of data at the end of the month to determine how to proceed—hinting at the possibility of bringing to an end “shelter in place” requirements, and indicating there are perhaps better ways to protect the vulnerable from the COVID-19 virus while also preventing the economy from spiraling completely out of control in the process.

Without a doubt, the practices we put into place today will make the biggest difference in how our businesses survive going forward. I have always been the kind of person to see the glass half-full instead of half-empty, and for this reason, I’ve decided to double down on the steps we need to take and the processes we need to put into place as an industry to ensure the auto retail industry survives and thrives in the months and years to come.

For the past five years, I have been shouting from the rooftops—and the training room floors, and the virtual online videos—about the need to implement digital retailing as a means of offering modern customers options when it comes to buying cars. Not everyone wants to come to a car lot to shop for their car, especially today, where all of the shopping and research can be performed online from the comfort of one’s own home. Add to that the fact even fewer customers want to be trapped in a car dealership for the better part of a day while trying to obtain credit approval, and you’ve already got more than enough reasons to make auto dealerships online friendly. Add to that a global pandemic where people are afraid to leave the house, and you’ve got the perfect storm for a major shift in how things are done.

I’ve talked extensively about proactive auto dealer groups like CarMax and Carvana, and how they’re blazing new and innovative trails to market and sell their vehicles. I’ve also discussed ideas like express valet services to make the buying process simpler on the customer and to add fluidity to the closing process.

Why would anyone want to keep a customer on the sales floor for hours on end to buy a car or obtain financing when it can all be done online in a seamless fashion? Are there any advantages to that? None at all, as far as I’m concerned, and many automotive groups agree. Many have already moved far beyond the old world methodologies and are embracing the new: giving customers the ability to go online to self-desk and determine their creditworthiness early in the process is one example, but it’s by no means the only thing that’s being done. Building a bridge between your sales floor and the internet also gives customers the ability to shop online and choose vehicles that are within their budget.

Through soft credit pulls, customers can learn if they’ll be approved without impacting their credit scores. This process ensures the customer is placed on the right vehicle from the word “go” and doesn’t wind up having to scrap the whole deal on the discovery they will not qualify for something that’s out of their budget.

Several providers let the customer finalize the transaction with a wet signature should they want to complete the transaction online. They present product options and let buyers choose what they want from an automatically presented menu. Leveraging a single-point sales associate or F&I manager, auto dealers can answer questions or explain product offerings remotely, assisting the customers in making decisions if they’re stuck. F&I managers can complete DMV paperwork to ensure compliance with required disclosures, and they can even finalize sales remotely.

If this sounds like some futuristic way of selling cars, you’re right. It is. And this is the way a rapidly growing number of car dealerships are going to have to begin conducting business in the post-COVID-19 world we’ve been thrust into.

The question now is: Why aren’t more auto dealers considering their online options, or at least being willing to be more flexible in the services they offer? Maybe they think online sales will reduce profits? No matter which way you slice it, it’s a gamble. You can either choose to gamble that things will go back to the way they were before the Coronavirus changed the world, or you can choose to gamble on retaining customers based on your flexibility and willingness to give them the buying experience they want and will demand.

Some customers may still enjoy the traditional way of buying. Maybe they enjoy negotiating and feel they can haggle their way into a better deal. But the vast majority of future customers are going to seek out alternative ways of doing business—whether out of fear for their own personal health or out of fear for the health of family members whose lives could be put at risk. If it’s easier and safer to do everything online and have the car delivered to their door, which option do you think customers are going to choose?

Many states appear to be moving in the direction of shelter in place directives, but these likely will not last forever. The individual states and country need to find ways going forward of allowing people to go back to work and for business to resume without also compromising the health of the citizens.

There is a fine line that must be crossed in the weeks and months ahead, and dealers have to take a proactive approach to determine what the future of auto sales will look like. Will traditional dealerships be wiped off the map as more online-based auto sales services begin to fill the explosive need for a less “hands-on” buying experience? What are the best ways to market vehicles and meet the needs of customers going forward? Does it make sense to offer the customer the option to buy online or use traditional methods?

Chernek has always offered the very best in F&I development from the time the customer touches down on the dealership website to desking to finalizing the transaction with a single point sales associate or F&I manager. For years Chernek preached a holistic approach: every manager and every department must work in unison. With a strong understanding of the importance of a well-trained staff, BDC, and F&I, Chernek specializes in things many auto dealers wouldn’t think to include: like how to make a virtual connection with a customer using the right body language in a video call, or successfully merging an online sales platform to match with a dealership’s onsite workflow and existing processes. This important step handles much of the heavy lifting and allows for miracle of automation to do its thing.

When is the right time to engage with a customer during the digital journey? A customer relationship is still critical to meeting expectations don't undervalue. What are the appropriate word tracks that gain better interaction? How do you address customer questions without sabotaging the sale or negatively impacting your profits? How do you find a tech provider with a track record of assisting companies in auto sales that actually works? Contact Rebecca Chernek today for the answers to these questions, and to review her list of services—including her online real-time Zoom webinar coursework. Call 404-276-4026 or simply text “online training” to get more information, and follow Rebecca Chernek on Facebook or LinkedIn. Check out F&I Today on CBT Automotive Network for all Becky's F&I complimentary episodes.