Protective Insurance recently released its F&I Industry Report. The 12-page report includes an overview covering the state of the industry as well as specialty markets such as RV F&I product sales.
During the initial pandemic years, consumer demand for RVs was high. RV manufacturer’s shares more than doubled from 2020 to 2021 and RV demand has fallen since that time, the report said.
According to the report, selling F&I products has become an important way RV dealers can navigate the fluctuating market.
Dealers increasingly are focusing on educating their employees and their customers about the benefits of F&I programs, said Travis Wools, Protective vice president of marketing and communications.
“Consumer acceptance rates continue to trend upwards,” Wools said, “and while this certainly says something about the value of these protection programs, it probably says more about what dealerships are doing to help their customers see the value.”
According to the report, popular products include vehicle service contracts, certified pre-owned warranties, vehicle prepaid maintenance and guaranteed asset protection.
When it comes to weathering market changes, F&I product providers are concerned about the same market trends affecting dealers, Wools said.
“There are a fair amount of unknowns in the retail environment, ranging from inflation to interest rates and continued supply chain challenges… these are definitely challenges, but all are things the industry has worked through in the past,” Wools said. “With employment rates remaining fairly strong, there is an opportunity for dealers to handle these headwinds.”
According to the report, of the RVs sold:
- 63% were financed at the RV dealership
- 47% contained a service contract
- 19% included a roadside assistance program
- 19% incorporated paint and fabric protection
- 16% contained tire and wheel protection
Dealers in the automotive market historically processed more inventory volume over time. For that reason, the automotive industry tends to be ahead of the game when selling F&I products.
Differences between how RV dealers successfully sell F&I products and how automotive dealers sell those products are lessening, Wools said. More RV dealers are informing consumers and emphasizing how valuable various protection programs are, such as tire and wheel protection, earlier in the consumer’s research process.
“There is greater opportunity to help that consumer understand the benefit.” Wools said. “Providing tools like online videos and online content can help the customer feel as educated about protecting their RV investment as they are about choosing what RV is for them.”
Thirty-five percent of RV finance contracts contained GAP coverage, according to the report. Automotive GAP coverages have been impacted by inflation as car prices rose sharply and contracts needed to increase coverage. Wools said more data is needed to determine whether RV dealers are seeing the same effect.
