Digital auto retailing has seen increased growth in many areas of the car business. Startups that offer direct-to-consumer and peer-to-peer online car buying are among those who have used it to help facilitate sales. This trend only stands to increase over time as more and more businesses in the car industry take advantage of the present day technology.

Effect on F&I Offices

Digital Auto Retailing

While digital auto retailing may not have a big impact on F&I offices now, this is very likely to change as time progresses. Alec Gutierrez, a senior analyst from Kelley Blue Book, agrees. "I would honestly say, within two or three years, I wouldn’t be surprised to see a majority of dealers having at least a buy-it-now, shopping-cart, digital retailing solution integrated into their websites," said Gutierrez.

Since digital auto retailing was implemented, Gutierrez has seen improvements in F&I departments. Gutierrez has noticed that "more transparent online pricing" is benefiting sales and that extended warranty penetration among dealers has increased.

Limitations

Although digital auto retailing has many advantages, it also has its limitations. Cars are big ticket items and consumers often want to speak with a salesperson personally. At the very most, it is estimated that only five percent of consumers are willing to finalize a deal online.

However, digital auto retailing offers consumers a way to begin the process. Gutierrez expands on this point further by stating that he believes that consumers will be "more and more willing to at least start the process, apply for credit, get a real deal baked and perhaps just not sign on the dotted line, but at least walk into the dealership fully informed on what they should expect to pay" if the dealer has utilized this retailing method.

Time and Convenience

Acquiring new customers or closing deals are often the first few benefits that come to mind with digital auto retailing, but there are other substantial advantages that are not primarily thought of. Examples of these benefits include saving time and adding convenience to both consumers and dealers.

With digital auto retailing, consumers will know the price of a vehicle and can begin creating deals themselves. This saves the consumer and the dealer time, which allows them to focus on other aspects of the car buying process. Gutierrez confirms this by noting that "you’re a little bit more open to spending time on the test drive, understanding the values of the car and ultimately understanding how to protect that car by an extended warranty and some of the other products that are available in the F&I office" when a price is already established.

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