Modern F&I Strategies To Enhance The Customer Journey with Paul McCarthy

In this ASOTU CON 2024 session, hosted by Kyle Mountsier, Paul McCarthy, VP of Sales at Protective Asset Protection, joins the conversation to share insights into the automotive finance and insurance (F&I) sector. Paul, who transitioned from a 30-year career in automotive retail to the F&I side, discusses the evolution of the industry and the importance of improving the finance process for customers.

Paul emphasizes the need for transparency and education in the F&I process to alleviate customer anxiety and enhance their purchasing experience. He highlights how dealerships can leverage digital content to inform customers about F&I products early in the buying process. Paul also discusses the critical role of F&I in today's market, especially amid economic uncertainties and changing customer expectations. The session underscores the opportunities presented by industry changes and the importance of ongoing training and adaptation for success.

0:00 Intro
0:55 Transition from automotive retail to F&I.
2:14 Addressing customer angst in the F&I process.
4:06 Adoption of transparency and online tools in F&I.
5:21 Educating customers about F&I products effectively.
6:51 Importance of F&I amid economic uncertainties.
8:00 Opportunities and changes in the automotive industry.
9:21 The importance of ongoing training and adaptation.

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Transcript

Unknown: 0:02

you're listening to the asotu con sessions by Effectv, live from asotu con 2024

Kyle Mountsier: 0:09

All right. This is Kyle mountsier, and I am on the asotu con podcast stage in collaboration with Effectv. Welcome to asotu con conversations. Paul McCarthy, thanks for joining me. Well, thank

Paul McCarthy: 0:20

you so much. Kyle, it was great to be a part of the reception last night. Oh, man, yeah, that was several people thanked me for buying them a drink.

Kyle Mountsier: 0:28

That's always a great way to start. You're like, I'm the guy that bought the drinks. Everyone happy? Yes, done. Paul. You are the VP of sales at protective asset protection, which is a little bit of a tongue twister, but you, before getting to the F and I side of the business, you spent a ton of time in the retail side of the business. Why? Why and when was the transition and what caused that? Well,

Paul McCarthy: 0:55

you're right. I spent about 30 years in the retail side. I ran a good sized dealer group for the last 18 of those. I think my fondest memories perhaps thinking back on how I got started in the business a fairly fresh immigrant from Ireland, and saw a job in the newspaper that said, we'll guarantee you $1,200 a month while you're learning how to sell cars. And it's been a fun ride since then, for sure. So lots of change. I think that, you know, maybe a sort of retirement or sort of moving to another stage, was that to move on to the administrator side, and it's been great to explore that side of the business and continue to learn. You

Kyle Mountsier: 1:38

know, in in the business, we talk a ton. You go to any event. You can hear about marketing. You can hear about the sales process. You can hear about, you know, fixed stops. But rarely do you hear about the fact that the thing that sometimes frustrates or is the hardest for the customer is that very last point of contact the time, where they're with the finance person, or they're looking at, you know, the protection or terms, or whatever it may be, and that there's, like, a lot of angst around that. Why do you think that is, and why have we not solved that as a cultural norm in our industry?

Paul McCarthy: 2:14

Well, I think, certainly, you know, the length of time that it took in the process was part of the frustration the customer had bought their car in their mind and they wanted to get in it and drive it. So I think that, combined with, you know, we kept this kind of secret office in the back and the customer went into to buy product, I think today we have an opportunity to make that process so much more friendly. We can inform the customer up front online, on our website, we can show them videos and explanations of the you know, the products that that they have the opportunity to buy in conjunction with their vehicle purchase, how it benefits them. And I look the studies show that customers who know about these products are two times more likely to purchase and and they're interested in and finding out more information. So I think rather than springing surprises, we should be focusing on increased transparency. Well,

Kyle Mountsier: 3:15

I think when you think about just the word fear and why fear exists, it typically has one of two kind of basis points, right? One is either the fear of repetition, of something that you don't love, right, something that you've experienced that you don't like, and probably more fear actually comes from an experience of the unknown, like what I don't know, what's in front of me is what I fear because I don't know how to describe it, explain it, or understand what's coming next. And what you're saying is like, basically how to get rid of fear or anxiety or anything like that, is give more information. Are you seeing dealers adopt that wholesale, or is that still like a struggle to get people to go, Hey, this is the stuff that we sell, and you can experience in the F and I office way earlier in the process.

Paul McCarthy: 4:06

Yeah. Kyle, great question. I mean, obviously, as a protective as a product administrator, we need information so that we can approach the marketplace properly. So we do an annual survey and we ask these exact questions that you're asking. So what we've discovered is that 25% of our dealers would allow a customer to conduct the vehicle purchase, including the finance portion, completely online. 40% of would allow them to do most are much of it online. So more and more Yes, dealers are adopting that, I think it's important that all dealers embrace this, because customers are trained by many other online shopping portals that they need to have enough information, they need to see reviews, they need to see pictures and product descriptions. So we should be no strangers to that in the car business.

Kyle Mountsier: 4:59

So. How, how do you enable that? Like, what does it look like to actually do that? You said, Pick pictures and product demonstrations. Because, you know, selling an intangible, you know, a non touchable item is a lot harder in pictures and product descriptions. Like, how do we educate customers of this? Well, without overwhelming them with a bunch of words, right? So

Paul McCarthy: 5:21

I think in exactly the same way that we sell a car, we have to show the feature, and we have to show the benefit of that feature. So most administrators, certainly at protective will provide the video content, will provide the, you know, the PDFs or whatever material the dealership needs to upload to their website that is customer friendly. It's customer facing, and it explains, again, the features of the product and the benefits of those to the customer.

Kyle Mountsier: 5:52

Right now our industry is going through kind of like this shrinking of margin, this an affordability issue that is widespread because of inflation and high interest rates and as well as just the change in the guard of culture, right, pandemic is over, the inventory shortages, where things were all easier over. Where does the finance process? Where does that fit in? In this net new norm of, Okay, we're back to, you know, going after pricing, we're going after monthly payments, we're going after customers, and maybe a way that we've done in the past in massive discounts, and now we have to have that customer experience getting to the FnI office with almost a net new process than what we experienced the last three years. How does the FnI office control the things that they can during that time? So

Paul McCarthy: 6:51

I would say, Kyle, it's probably never been more important. You know, it's a time of uncertainty. There was a time when, you know, oil changes were 995 or 1995 now nobody knows how much it costs, except that it just costs more every year. It's the same with vehicle repairs. They're up 20% if we ask customers, do you think they will it will be more expensive next year? In three years time, they're going to say absolutely so, protecting yourself against that unforeseen expense at today's prices. Have you know makes more sense for a customer, particularly as you point out, they may be somewhat stretched payment wise, because of economic conditions, the interest rate on their loan, certainly the prices of other things that are necessary for them to support their household. So vehicle protection products, I think, you know, really are in a very important part of the purchase. It's

Kyle Mountsier: 7:50

awesome. What are you most excited about in our industry right now that you're looking at that, you're going, Man, that is such an opportunity for us as an industry.

Paul McCarthy: 8:00

Well, I think anytime we see change, it's always for me, it's a source of opportunity. I think, you know, a lot of dealerships we see change and we're like, Oh no, it's all bad. It's all bad. But actually for us, it's an opportunity to stay informed, to be prepared for the customer, to meet them where they are, not just in the showroom or online, but also where they are in their minds about a vehicle purchase, whether it's a necessity, whether it's, you know, one of desire. So I think there's an opportunity to embrace this new way of doing business, to get digital content out there in front of the customer and and to to meet them where they are, quite literally, yeah,

Kyle Mountsier: 8:46

it's it's interesting. Whenever we get into more strenuous situations in our industry, it seems like we all get resolved to do something that's better for the customer. And so I hear you and you say that it's like, oh, this is an opportunity to look more deeply. And this might be a piece that we can really latch on to and go, Hey, Mr Mrs customer, this is something we want to show you. We want to care for you in this way. And it is. It's an element of care. It's like, I love your you know, it's going to get more expensive protect yourself at today's value. And that's an education point that we can really lean in on.

Paul McCarthy: 9:21

Yeah, and this is a part where I think all of us have to constantly undergo training. We think we know something because we've been doing it for 10 or 20 or 30 plus years, but we forget things along the way. Our new things happen that we need to know about. It's one of the great things about this event, is it's an opportunity for us to relearn old information or expose ourselves to new information. Yeah,

Kyle Mountsier: 9:46

well, that's awesome. Well, Paul, thank you so much for joining me on the show. It's been a pleasure, and thanks for partnering with us for the welcome reception and all the drinks.

Paul McCarthy: 9:55

Well, of course, thank you so much, Kyle, for your hospitality. It's a wonderful show. Absolutely.

Unknown: 10:00

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