Convenience of Research and Shopping Impacts Purchase Decision
The ease of accessing finance and insurance (F&I) products is becoming significant for younger buyers. A survey by Protective Asset Protection in April revealed that 35 percent of Gen Z respondents considered convenience a key factor in their purchasing decisions for add-ons, compared to 10 percent of millennials and 11 percent of Gen X. Gen Z holds significant purchasing power as they join the workforce.
The survey found that 13.5 percent of respondents viewed convenience as essential in purchasing add-ons, with over 56 percent preferring to research F&I products online before buying at the dealership. Trust in the dealership was crucial for 11 percent, while 68 percent felt pressured into buying F&I products. Among users, 29 percent said only minor repairs were necessary, and 26 percent found F&I products somewhat helpful for minor repairs.
COVID-19 has driven the emergence of various digital F&I products and strategies. According to Travis Wools, Protective’s VP of marketing and communications, dealerships must tailor their sales approaches to different generations’ needs.
Despite stabilizing vehicle prices, high interest rates are driving up monthly payments. Survey respondents indicated that product cost, budget, and repair costs are primary factors influencing F&I product purchases. Wools anticipates a surge in interest in F&I products in the coming months and years due to rising vehicle ownership and repair costs.
How the CARS Rule Decision Impacts Dealers
The FTC’s Combating Auto Retail Scams (CARS) Rule faces a legal challenge from the National Automobile Dealers Association and the Texas Automobile Dealers Association. Shannon Robertson, executive director of the Association of Finance and Insurance Professionals, noted that the FTC developed the CARS Rule in response to consumer complaints.
The legal battle is ongoing in the U.S. Fifth Circuit Court of Appeals, with arguments scheduled for October. The CARS Rule, which was set to take effect on July 30, regulates dealership advertising and F&I practices. If dealership groups lose, stores could be subject to FTC regulations implemented on December 12, pending appeals.
Dealerships must provide an “offering price” for each vehicle, including all costs except government fees and taxes. The FTC may extend this requirement to other industries if the rule remains in effect. Dealerships would need to disclose offering prices transparently in all consumer communications and maintain compliance records for two years.
Streaming Crown Remains with Netflix
Netflix added 8.05 million subscribers in Q2, surpassing the 5.89 million added last year. Revenue rose nearly 17 percent year over year to $9.56 billion. Netflix raised its 2024 revenue growth forecast to 14-15 percent, driven by pricing adjustments, restricted password sharing, and expanded advertising services.
Netflix leads the streaming industry with original content like “Bridgerton” and successful live events. The company plans to shift its focus to pricing tiers and annual revenue guidance in the coming year.
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John Paul Strong
John Paul Strong combines his two decades of automotive marketing experience with a team of more than 150 professionals as owner and CEO of Strong Automotive.
