10 Questions to Ask Yourself When Choosing a New F&I Provider

Whether you’re a franchise dealer or an independent lot, how you choose an F&I provider is just  as important as who provides your floor plan financing or what auction you go to when sourcing inventory. 

Choosing a provider in today’s automotive environment is a bit different than it was just a decade ago when there was a large number of administrators in the space. Some names had been around for generations and some were just getting started with the promise of bringing something new to the table.

Now there are fewer F&I providers than ever. 

Why? Mergers & acquisitions.

Private equity fueled ‘Pac Man’ gobbling up smaller companies all over the country. Only it’s not a game…it’s impacting dealerships of all sizes by whittling away at the choices they once enjoyed to get the best F&I experience for themselves and their customers.

If your dealership is actively looking at changing from your current provider, here are 10 questions to ask before making this critical decision:

  1. Are they up for sale? A provider won;t exactly say they are but if you read the trades, you may have some idea. Smaller companies that don’t have much of a foothold in the market or those that work exclusively with new or used may be a target for a larger player looking to grab more market share. Don’t be afraid to ask how they are positioned for the future because it will impact yours for sure.

  1. How Large is Their Menu of Products? There is no sense in wasting time with a provider with a limited amount of products to offer. It should run the gamut of common offerings to give your F&I department the best chance to increase PVR and overall margins each month. Ask to see the menu upfront and ask if new products are coming soon.

  1. What Kind of Platform is Available to See Everything at a Glance? There is nothing more frustrating as an F&I Director than having no clear way to see how your team is performing against goals, what products are selling best and holding the most reserve, and where your dealership position is on remits, cancellations, claims, and reinsurance projections. Your provider should be able to offer a transparent and efficient way to see all performance metrics at a glance.

  1. Was There Any Dealership Input Into the Product Selection? If the F&I provider has never solicited the input of dealers to help create their product selection or any other parts of the process, think again. Dealerships know what they need and they know their customer better than anyone. Getting dealership feedback across the spectrum helps ensure success for the provider and that trickles down to you. 

  1. Who is the Insurance Company Backing Them? If they don’t immediately say A+ rated carrier as their primary claims administrator, keep looking. Nothing less than that should be backing every policy your F&I team sells. 

  1. Is their Reinsurance Program Turn-Key or Complicated? This speaks for itself. It’s your future profit participation on the line. Easy is the name of the game here.

  1. Can You Easily Private Label All F&I Products? Any F&I provider who understands the power of private labeling and solidifying your brand in your local market will offer this and have all the marketing support necessary to make it a success right from the start. And if they do, there better not be any additional fees to launch it.

  1. Will They Help You Strengthen Existing Lender Agreements? Many dealers forget to ask about this but it can be a much easier way to hold a higher PVR when you can get more product worked into the deal. A good F&I provider will offer to review all indirect agreements immediately to see where there are opportunities to get higher profits and shorter chargeback times.

  1. Are they fully digital? This may seem like a no-brainer but there are still some providers who still haven’t made the full transition to a digital and remote deployment for F&I. We know…crazy!

  1.  Do You Work with Every Major Menu Platform? They should or what’s the point. Not every dealership uses the same F&I platform and any good F&I provider should be able to place nice with them ALL.

You could ask every provider you reach out to these questions or you can simply reach out to us here at truWarranty. Our answer is YES to every question here. We were built by dealers for dealers. 

But unlike some providers today, no dealership has a stake in truWarranty. We stand on our own to help every dealer, big and small.

And Pac-Man is not coming after us…we’re not for sale. truWarranty is doing things differently with your profit in mind before ours. How’s that for a breath of fresh air? 

Drop us an email for a demo and let us compare your current program with what could be. We’d love to help.

date published
April 7, 2023

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