A REPORT by leading automotive solutions company, Op2ma, has found that time spent with business managers offering finance and insurance products is critical to customer take-up of the products and even more critical to satisfaction with the process.

In spite of a general perception that people want to spend as little time as possible with business managers, the research shows that buyers who spend the most time with business managers purchase more, feel less pressured and are far more satisfied with the process.

Op2ma, a wholly owned subsidiary of Fusion Business Solutions, released its ‘2019 Australian National Finance and Insurance Customer Survey Report’ at the recent AADA Convention.

According to the report, the amount of time spent with the F&I person varies.

“Nearly 50 per cent spent less than 20 minutes with the finance and insurance person, yet research indicates the optimum amount of time to spend with the F&I consultant is approximately one hour,” the report said.

“When an hour is spent, outcomes such as better explanation of the products and higher satisfaction levels result. The more time spent with the F&I person results in a greater likelihood of a finance sale.”

The report said that for those who spend less than 20 minutes with the F&I consultant, only 12 per cent purchase finance with the dealership. For those who spend more than 20 minutes but less than an hour, this figure jumps to 65 per cent.

It climbs even higher again to 84 per cent when a customer spends more than an hour with the F&I consultant although the data shows that only 15 per cent of buyers are with the F&I consultant for more than an hour. Retired buyers spend the least time with the F&I consultant.

The report said the data clearly indicated that more time is spent with the F&I consultant the probability of consumers financing with the dealership increases, adding that “the ideal target time with the F&I consultant should be one hour”.

The survey also revealed that almost four in five consumers feel they spent an appropriate amount of time with the F&I consultant and that three in four customers who spend more than an hour with the F&I consultant felt this was the right amount of time. This proportion increased to nine in 10 among consumers who met for more than 20 minutes but less than one hour.

The number of customers who felt pressured to purchase F&I products increased to almost one in seven. However, 74 per cent of customers who felt under pressure to purchase finance and/or insurance products when they visited the dealership did finance their vehicles at the dealership.

“The issue of sales pressure is one dealers need to manage carefully, and it appears that the more time spent with the F&I person, the less likely the customer is to feel pressure,” the report said.

Other highlights from the report include:

• Nearly 80 per cent of customers (up from 64%) consider their financing options before they start looking for a vehicle.
• Only one in every 10 respondents considers payment options after they have decided on their vehicle. This suggests dealerships should promote finance products earlier – either before or during the sales process – rather than relying on the F&I consultant to broach the subject after the sale.
• Dealerships are the sixth most popular choice of insurance cover; 44 per cent go to auto club insurers and 26 per cent with a dealership.
• Insurance still represents an excellent source of additional income for dealerships, though the data would suggest the effort directed at selling insurance has reduced since last year.
• Fewer insurance and warranty products are being offered by dealers, however customers “are telling us if they had been offered these products they most likely would have purchased”.
• Seven in every 10 customers insure their vehicle with their existing insurance provider. Price and level of cover are also notable motivators.
• There has been a major rise in the number of buyers paying for their cars from cash savings, whilst funding from dealership finance and from banks has dropped.

The report concludes: “In general, there is no substitute for quality as the finance and insurance consultant still has the greatest impact on customer purchasing outcomes. Not surprisingly, F&I consultants who possess high levels of skill and competence still convert more opportunities into sales. A direct correlation between the F&I consultant and the income derived for the dealership still exists.”

Op2ma collated the responses from a large number of customers across seven states and territories, 33 manufacturers, 12 dealership groups and 21 financiers.

Readers can request a copy of the report snapshot by contacting Op2ma at annc@op2ma.com.au.

By John Mellor