Curbing vehicle ownership costs for customers while remaining profitable is a long-standing challenge for dealerships, especially when some of customers' spending concerns are entirely out of a dealer's control. Auto insurance rates, for instance, impact customers' budgets just as much as fluctuating gas prices.
Some industry insiders believe bringing auto insurance offers into the dealership can cut customers' costs, improve customer experience and even increase F&I sales.
Organizing auto insurance outside of the dealership often is an afterthought for customers, generally resulting in an unpleasant surprise, says Austin Ledgerwood, head of strategic partnerships for mobility, Americas, at Cover Genius, a global insurance distribution platform.
Ledgerwood, formerly of Cox Automotive's Flexdrive subscription program, says if customers could arrange for competitive auto insurance while at the dealership, they would leave the dealership with a more holistic view of their auto-related expenses.
Dealership employees can become licensed insurance agents through the Allstate Dealer Services program, which has been around since 2012. However, it's not part of the sales or F&I process.
Additionally, there's nothing to prevent a dealership from setting up an office for an insurance agent or even investing in a digital platform that allows customers to view multiple policy offers in one place.
Services such as DealerPolicy, a digital insurance platform, allow customers to compare quotes for car insurance while they wait to enter the F&I office. Participating dealers say that helping customers save money keeps F&I product sales from competing with insurance costs.
Customers receive quotes from various insurance providers through the platform. If a customer chooses to go ahead with a policy, they can video conference with a DealerPolicy employee from the dealership who will act as an intermediary between the insurance company and the customer.
If customers can compare rates at the dealership and secure a lower payment than expected, they may also be more inclined to purchase F&I products.
Selling auto insurance at the dealership reduces the lag between purchasing a car and insuring it, improving customer satisfaction. Dealers should consider becoming a one-stop shop by investing in a digital or physical platform that connects customers with auto insurance providers.
