Built-to-order vehicles are unlikely to bypass in-store F&I

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Asked about the possibility that automakers are building-to-order with an emphasis on finance and captive products, and costing dealers an F&I opportunity, the National Automobile Dealers Association said deals always end at the dealership.

“Even in a make-to-order or reservation system, customer orders are always placed by the dealership on behalf of the customer, and the sale of the customer itself always takes place between the dealership and the customer,” Jared wrote. Allen, spokesperson for the National Automobile Dealers Association. in an email. “As a result, customers can still benefit from a wide range of possible financing options, obtained by themselves or through the dealership.”

Elliot Schor, vice president of business operations for the JM&A group, said he felt custom manufacturing was done more “out of necessity” due to limited and scarce inventory from a customer demand perspective. He also doubted that dealers would lose the opportunity to sell F&I products if automakers focused more on the order bank model.

“Most of the roads still end at the dealership,” Schor said of order sales. Even as automakers were looking to expand the online ordering process, he didn’t anticipate that they would take F&I out of the hands of dealers.

“The dealers have to be viable,” said Schor. And dealers would have a “significant problem with manufacturers” if F&I performance were to decline due to an automaker’s practice.

Noren said questions remained about what role the retailer would play in the future with more bespoke sales. That role might even be different depending on the make or model, she said.

However, the franchise laws are “very difficult to get around” and she doubted the dealers would be eliminated from the sale.

“Retailers always play a critical and critical role” in both the selling and ownership experience, said Noren.

Brian Finkelmeyer, senior director of new vehicle solutions for Cox Automotive, said he believed trying to cut dealerships would create an “extraordinarily high degree of conflict.” He doubted the automakers would choose this fight.

He also referred to the experience of a Ford dealership he spoke to. Despite trends such as online retailing, few of the dealer’s customers had engaged in make-to-order transactions, according to Finkelmeyer. It was much more likely that customers had simply requested one of the vehicles the dealership had ordered but not yet received, he said.

So it would be “financial suicide” for Ford Credit to undermine this dealership on the minuscule percentage of sales made using make-to-order, Finkelmeyer said.

The concessionaire would just say ‘knock yourself out’ and hit back by channeling the overwhelming proportion of the remaining volume to an indirect third-party lender, Finkelmeyer added.


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