Assurant Automotive - Newsletter

Will Online Car Shopping Be the New Normal After COVID-19?


Developing a Digital Retailing Approach that Drives Profitability for Your Dealers

Earlier this year, when social distancing and shelter-in-place orders were in effect, auto sales took a hard hit. Short-term findings indicate that social distancing measures prompted an estimated 65% drop in sales volume in March 2020. But there’s good news. A Q2 analysis by KPMG suggests that online approaches to vehicle sales have “bent the curve,” and sales are beginning to stabilize1.  While our industry's recovery period is inevitable, there’s some uncertainty around what “the new normal” of vehicle purchasing will look like. Early indications suggest that social distancing will have a major long-term impact on how dealers sell vehicles and the F&I products attached to them.

Consumer Feedback on the Vehicle Shopping Experience

In recent years, consumers have been clear about wanting more online options throughout the car-buying process. A pre-COVID-19 Assurant study found that between 85% to 90% wanted a better car-buying experience with more online options but still wanted the flexibility of completing steps in store. Here were some of the top findings around the car-buying experience.2

Consumers dislike the long wait times, time on paperwork, and sales pressure

#1 frustration is time spent at the dealer, especially on negotiation/paperwork (47% of the time)
Satisfaction is highest in the first 90 minutes and declines from there; the average delivery time today is 3 hours
Consumers want to reduce time at the dealer, enjoy the convenience of home shopping, increase the flexibility of the buying process, and reduce sales pressure

Consumers enjoy seeing/test-driving vehicles and engaging with dealership staff, but COVID-19 has accelerated interest in home delivery

62% of consumers still want help from dealership staff, and 60% want to get to know the vehicle more
Most buyers want to see/drive the vehicle, but technology is reducing barriers: 50% viewing a virtual tour as acceptable, and 90% would be open to test-driving at their home/office
Before COVID-19, only 12% were interested in fully executing the purchase with home delivery. Today, that number has jumped to 75%.

The result is that consumers want car-buying CX their way: a mix of online/offline options

95% of consumers want a combination of offline and online options during their journey
94% want to shift the time-consuming portions online: configuring payments, reviewing documents, and reviewing contracts online
89% would be more likely to purchase from a dealership that offered online options

COVID-19 has accelerated many of these trends, including prompting a decisive increase in dealers' importance having a strong approach to digital retailing and/or virtual transactions. The digital survey by KPMG suggests that to meet the increased demand for online car shopping, 80 to 90% of U.S. car dealers will fully adopt e-commerce capabilities by the end of 2020.1

The Role of Digital Retailing Has Accelerated – and it Includes F&I.

With the recovery process and reopening businesses well underway, the auto buying process is likely to look different moving forward. With inevitable concerns around health and social distancing top of mind, consumers may want to complete even more of the car-shopping process online.

Given the critical role F&I products play in dealership profit margins, now is the right time to think through how these key profit-drivers integrate into the digital retailing strategy. Studies show that customers who research F&I products during the pre-buying process have higher attachment rates at the end of a sale.2

Recent Assurant research indicates that online attachment of F&I products can play a big role in dealer profitability. Here are some of the key findings:2

  • 40% of consumers are interested in adding VSCs online. This is aligned with standard industry attach rates.
  • 92% of buyers want to learn more about F&I products and review product details online in advance of making a purchase.
  • 63% say they are more likely to purchase an F&I product if they have the option of learning about it on their own time.

By being able to conduct F&I research on a dealer website, buyers will be more prepared to purchase both a vehicle and F&I products once they contact the dealership.

How Can Dealers Get Started with Digital Retailing for F&I Products?

To help your dealerships build a digital retail approach that highlights your F&I product suite, our product, training, and marketing teams outlined some of the steps below.

  1. Create a guide that can help dealers successfully execute virtual F&I sales. From setting up their technology infrastructure to conducting a virtual meeting and getting the paperwork signed electronically, a guide can help your dealerships prepare a process that makes presenting your products and closing the deal online easy.  

  2. Provide your F&I menu virtually by creating an easy-to-tailor F&I virtual presentation.  This tool can  help communicate the benefits of F&I products during a virtual meeting  with a format that can be customized by the dealer based on your customers’ needs.  

  3. Create or encourage the usage of easy-to-understand videos that make the value of F&I products more accessible to dealer customers. 

  4.  Schedule time to discuss your digital retailing approach with your Account Executive. We can help answer questions you or your dealers have about digital retail approaches that drive PVR. 


1 KPMG, “Anticipating the green flag: Accelerating a COVID-19 exit for auto dealers.”

2 Assurant, 2019 auto survey. Survey population: 630.