Expanded F&I Options Online, Increased Used Vehicle Sales Play a Larger Role in F&I Transactions Today

CHESTERFIELD, MO (June 9, 2021) – Protective Asset Protection, a leading provider of F&I programs, services and dealer owned warranty company programs, announced the results of its latest industry survey today, which illustrates how the pandemic impacted the sales of F&I products both online and at the dealership. The survey also addresses the increased role of digital retailing along with an increased shift in consumer demand for used vehicles.

Protective Asset Protection commissioned an online survey during March 2021 and took the pulse of nearly 500 F&I and dealership executives across the U.S. According to the feedback, approximately a quarter of respondents said the sale of F&I products to customers has increased between 5% - 10% so far in 2021 compared with 2020.

The pandemic created an opportunity for dealers and their F&I departments to offer more digital tools when customers are researching and selecting F&I product options for the vehicles they are shopping for. Forty-five percent of dealers now make F&I product information available online, followed by financing options/loan application online (35%), and F&I product selection and pricing online (33%).

Other key highlights of the F&I product survey:

• 44% say the ability to adjust products offered based on a customer’s needs are most needed to sell F&I products online; followed by the ability for customers to select product and coverage options (41%), and online tools like videos to explain product benefits (38%).

• 42% say increased coverage for existing protection products such as VSCs would be the most impactful to improving F&I product sales; followed by a more diverse set of F&I product options (41%), and more F&I products designed specifically for used vehicles (37%).

• 38% say selling F&I along with increased transaction prices represent the biggest opportunities in selling F&I products today versus pre-pandemic; followed by longer loan terms (37%), and more EV/plugin sales (36%).

“With a greater emphasis on digital retailing, online shopping, used vehicle and EV/hybrid product sales, a larger number of dealers are looking for ways to maximize their opportunities in offering F&I products that cater to these shopper needs,” said Rick Kurtz, Senior Vice President – Distribution, Protective Asset Protection. “Expanded F&I product lineups, customized product offerings and additional F&I product education for both the dealer and their customers are all growing in importance for today’s transaction environment.”

ABOUT PROTECTIVE ASSET PROTECTION

Protective Asset Protection provides vehicle protection plans, limited warranty programs, GAP, and ancillary products through vehicle dealerships. Protective Asset Protection has been serving dealers for more than 55 years and currently provides products and services to automobile, marine, RV and powersports dealers. Protective Asset Protection is part of the financial services holding company, Protective Life Corporation. For more information about Protective Asset Protection call 800-323-5771, or visit www.ProtectiveAssetProtection.com.

ABOUT PROTECTIVE LIFE CORPORATION

Protective Life Corporation (Protective) provides financial services through the production, distribution and administration of insurance and investment products throughout the U.S. Protective traces its roots to its flagship company, Protective Life Insurance Company – founded in 1907. Protective’s growth and success can be largely attributed to its ongoing commitment to serving people and doing the right thing – for its employees, distributors, and most importantly, its customers. Protective’s home office is located in Birmingham, Alabama, and its 3,500-plus employees work across the United States. As of December 31, 2020, Protective had assets of approximately $127 billion. Protective Life Corporation is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc. (TSE:8750). For more information about Protective, please visit www.Protective.com.

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Media Contact:
John Sternal
Merit Mile
954-592-1201

Lease Credit Approvals Reached 69.9% in May; Down Slightly from 70.7% in April 

CINCINNATI, OHIO (June 8, 2021) – Swapalease.com, the nation’s largest car lease marketplace, reports car lease credit applicants registered a 69.9% approval rate in May. The approval rate is a very small decrease from the 70.7% approval rate in April.  
 
The May number, although lower than last month's rate, is higher than the same time last year, when the approval rate was at 68.6% right at the beginning of the pandemic. The steady, incremental increase indicates consumer credit levels are also holding steady as many households continue to receive stimulus relief provided by the government.   
 
As opposed to consumer borrowing, many are utilizing stimulus checks toward paying debt. With consumers reigning in their credit usage as well as lowering revolving debt, Americans have more confidence to go out and take over someone else’s vehicle lease.  
 
Swapalease.com believes many of its site visitors and vehicle customers have solid credentials available to take over a person’s vehicle lease. The stability to have more flexibility in leasing through economic uncertainly may contribute to an increase in shoppers looking to lease vehicles through the secondary market – where lease payments are much more appealing than what’s currently offered at a dealership.  
 
“Credit strength continues to stabilize due to the figures maintained throughout the first half of 2021 and we believe this will only continue into the second half,” said Scot Hall, Executive Vice President of Swapalease.com. “Because Americans are either saving or paying down debt with their government stimulus money, consumer credit confidence will ultimately continue to grow leading to larger spending in future quarters.” 
 
Swapalease.com matches a person wanting out of their existing vehicle lease contract with a car shopper looking to take over a short-term vehicle lease. The marketplace has thousands of cars and trucks available for transfer to anywhere in the continental U.S.  

About Swapalease.com:   
Headquartered in Cincinnati, Ohio, Swapalease.com is the world’s largest automotive lease marketplace and the pioneer in facilitating lease transfers online. More specifically Swapalease.com matches individuals who want to get out of their lease with people who are looking for short-term lease agreements. Prospective buyers can search the listings for the exact vehicle they want, and then register for a nominal fee, allowing them to use Swapalease.com’s safe online system to contact the prospective seller and close the deal. For more information about Swapalease.com or how to exit your lease early, call 866-SWAPNOW or visit www.swapalease.com.  

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Wantalease.com, the nation’s first online car lease marketplace for new lease deals, reports the latest update on new lease offerings entering the month of December.  While most automotive brand payments remained steady, many SUV and pickup models saw payment increases. 

Among the most notable are the Ford Ranger, with a +14.86% increase from November, the Chevrolet Traverse with a +14.65% increase, and the Honda Pilot with a +11.15% increase. The Ford Ranger is offered at a payment of $325 per month, the Chevrolet Traverse is priced at $329 per month, and the Honda Pilot is also priced at $329 per month.

Other SUVs with payment increases include the Ford Expedition, Cadillac Escalade, Lexus RX, and Infiniti QX80. The Expedition increased by +6.52%, the Escalade increased by +5.46%, the RX increased by +1.92% and the QX80 increased by +1.59%.

The Nissan Sentra is currently priced the lowest of all vehicles, coming in at just $149 per month.  The Sentra has held steady at the same payment for the past four months. The vehicle with the largest discount in December was the Cadillac CT5, with a decrease of -17.47%, bringing monthly payments to $349.

 “We anticipate that manufacturers will be holding steady on new lease payments despite the uptick in demand for new vehicles,” said Scot Hall, Executive Vice President of Wantalease.com.  “With the biggest shopping holidays of the year quickly approaching, its possible manufacturers may have increased prices entering December to make promotional offers seem more attractive to holiday shoppers.”

Other vehicles that experienced payment decreases for the month of December include the Audi A3, the Toyota Corolla and the Volkswagen Jetta. The A3 decreased by -11.26%, bringing monthly payments to $294 per month, the Corolla decreased by -7.56% bringing monthly payments to $189 and the Jetta decreased by -4.07%, bringing payments to $229 per month.

Wantalease.com is a sister marketplace to Swapalease.com, the nation’s largest online marketplace for leases.

Program Eliminates Dealers Turning Away Shoppers Who Have Time Left on Lease Contracts

Swapalease.com, the nation’s largest car lease marketplace, unveiled today its newest program aimed at helping automotive retailers whose customers are looking to change vehicle leases before the contract has fully expired. The new program, called “Mobility Leasing by Swapalease”, is a unique marketplace infrastructure dealers and OEM partners can utilize to help customers add more flexibility into their lease contracts.

For a variety of financial or life event reasons, it is estimated that nearly eight out of every ten1 lease drivers want to exit their lease contract before it is completed. However, buying out a car lease contract to change vehicles is a serious headache that comes with considerable financial consequences. Life events like marriage, a new child, job transfer and income changes have all prompted consumers to change into a new or different vehicle.

A recent Swapalease.com industry report1 found that dealers turn away roughly 38% of the customers who are interested in getting a new vehicle simply because they have more than a few months remaining on their lease contract. The new Mobility Leasing by Swapalease program is designed to immediately help dealers help these customers into a new vehicle.

How It Works

When a customer walks into a Swapalease-participating dealership and leases a new vehicle, their salesperson informs them they can return the lease after satisfying an initial grace period (usually 12 months). When the customer returns to exercise their option, the dealer immediately begins the process of helping them out of their lease by listing the vehicle on the Swapalease.com lease transfer marketplace, where there is historically more buyers looking for gently-used leases to take over. Shortly thereafter when a match is found, the customer is free to work out a deal on their next vehicle with the salesperson.

This process eliminates the frustration and expensive penalty consumers face when they want to buy out their lease early, and it helps dealers offer immediate assistance to those customers hoping to exit their lease because a life event has changed their automotive vehicle preference.

“Auto dealers have had several years of solid sales performance, including 2020 when the pandemic was believed to be far more destructive earlier in the year,” said Scot Hall, Executive Vice President of Swapalease.com. “Despite all of this, many dealers are still missing out on millions in additional or lost revenue by having to turn away customers who want to shop for a new vehicle but feel stuck in their lease contract. Our new program eliminates all of this friction on both sides and enables dealers to immediately help their customers add more flexibility into their driving needs.”

Dealers interested in participating in the Mobility Leasing by Swapalease program may call     866-792-7669 ext. 1000 for more details. Drivers interested in exiting their lease even if their local dealer is not a participant may utilize the Swapalease.com Consumer Direct marketplace located at www.Swapalease.com.

About Swapalease.com:

Headquartered in Cincinnati, Ohio, Swapalease.com is the world’s largest automotive lease marketplace and the pioneer in facilitating lease transfers online. More specifically Swapalease.com matches individuals who want to get out of their lease with people who are looking for short-term lease agreements. Prospective buyers can search the listings for the exact vehicle they want, and then register for a nominal fee, allowing them to use Swapalease.com’s safe online system to contact the prospective seller and close the deal. For more information about Swapalease.com or how to exit your lease early, call 866-SWAPNOW or visit www.swapalease.com.

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1: https://www.swapalease.com/mediacenter/leasing/files/2020_Lease_Trends.pdf

Texting consumers is a very effective means to drive engagement and, ultimately, sales. Text messaging has outpaced email when looking at conversion and click-thru rates. In fact, 95% of texts are read in ninety seconds or less after being sent. Texting is unquestionably a great tool to engage consumers, but it is not without legal and regulatory risks. Dealerships must be mindful of the FCC’s Telephone Consumer Protection Act (TCPA) – a regulation that has already put thousands of companies in the compliance crosshairs.

Car dealerships can put their business at legal and financial risk each time they act on a lead because the TCPA allows consumers and law firms to bring lawsuits over even minor compliance lapses. Over the past decade, the number of TCPA lawsuits has increased tenfold. With penalties of up to $1,500 per text/call in violation, and the cost of an average TCPA settlement over $6 million dollars, the potential threat the TCPA poses to a firm’s bottom line and reputation are real. Therefore, when a dealership sends a marketing message, compliance considerations should be top of mind.

Note - if the ultimate goal of the telephone call or text is to make a sale or promote a product, then the call must be deemed solicitous which means it is covered by stringent TCPA rules. Examples of telemarketing calls/texts are:

• Proactively reaching out to customers who purchased a vehicle because they are in an advantageous equity position such that they can trade-in their vehicle for a new model (Data/Equity Mining)
• “We are having a July 4th Sale!”
• Contacting a dealership visitor to follow up on a test drive
• Contacting a purchased lead list from a third party (cars.com / truecar.com)
• Contacting a referral

Here are the top compliance considerations to help your dealership avoid a TCPA lawsuit:

Honor do-not-call and opt-out requests. Train consumer-facing personnel on how to capture and log do-not-call requests. Additionally, when texting, provide instructions on how to opt-out and look for other common phrases like “stop/quit/cancel.” Opt-outs should occur immediately with most common texting platforms. Additionally, the FCC has commented that calls and texts (and prerecorded messages) are one in the same, so an opt-out of one should always apply to future calls and texts alike.

Keep records. Maintain all records that demonstrate compliance with the TCPA. This includes call or text logs that capture date/time, express written consent received from consumers, and opt-out or do-not-call request logs.

Only call or text consumers between the hours of 8 a.m. and 9 p.m. according to the consumer’s location. It is better to base a consumer’s location on their address and not their phone number due to cellphone mobility. For instance, if you call numbers with a California area codes at 8 p.m. PT, but the consumers live in New York, the consumers may complain about receiving calls at 11 p.m. ET (their local time).

Monitor compliance with these items. This is another one that may seem obvious, yet most companies fail to do so. It is a virtual guarantee that a company will find issues with most audits. Companies typically “don’t know what they don’t know.”

Bonus: Here is a more comprehensive compliance playbook designed for the automotive industry.

The TCPA has been around for more than 25 years but remains one of the most litigated consumer protection statutes. A quick Google search should shed light on the fact that the automotive industry is in the TCPA crosshairs. However, with proper compliance in place dealership can enjoy the benefits of contacting consumers with peace of mind.

Paul Gipson is the Director of Marketing Compliance Services for CompliancePoint, a subsidiary of PossibleNOW.

The latest advanced data technology and targeted marketing resources are poised to potentially make 2020 the most wonderful time of the (very strange) year for auto dealers.

The year began with auto sales expected to near the 17 million mark. Projections dipped to 8.74 million in April with the rapid and widespread shutdown from the COVID-19 pandemic and climbed back up to 15.18 million in August1.

Expectations for 2020 holiday shopping

Auto dealers and lenders have felt the sharp back-and-forth swings of the pandemic economy, and are hoping to ride an upswing momentum heading into the final stretch of 2020. As part of this, gearing up for end-of-year sales and incentive-fueled holiday shopping promotions are sure to be a big part of the game plan.

Overall, retail forecasters are predicting a 1% - 1.5% increase in total U.S. consumer spending between November through January, and a 35% bump in seasonal online sales2.

Auto dealers are hoping to grab a piece of this by leveraging the right target-marketing data resources. With unemployment rates at an all-time high, it is important to understand a potential buyer’s household income and discretionary spending so the right incentives are offered to the right consumer.

How auto dealers can tap into the holiday shopping pulse

New target-marketing data resources help dealers better identify consumers that are likely to be ready to take on new financing for an auto loan or lease. It can also better match those consumers to vehicle models that dealers have in supply based on how many of those consumers are likely to be able to afford. This is important because dealers and their marketing partners must re-evaluate their strategies in 2020 to better align with the changing consumer needs and financial capacities.

The COVID-19 pandemic certainly slowed economic growth, but it has done so in a way that’s different from past recessions. This year, consumers have been impacted in different ways during the pandemic. While some have increased savings and lowered debt, others have lost their jobs or experienced salary reductions.

Financial durability has become an important way to segment the economic health of households within the same credit bands. It considers a consumer’s assets, income from dividends and interest, retirement income, and the relationships between income, debt and spending. Today’s sophisticated economic anonymized marketing data resources tap into this information to help dealers make better and more precise decisions when putting an incentive-driven offer in front of a specific customer.

We now know that median credit scores, revolving credit utilization, monthly disposable income and debt-to-income ratios are all stronger today than during the Great Recession. Also, household deposits are four times as high, according to Equifax data3 from June 2008 to December 2019.

Shifting to a programmatic audience marketing strategy

Another way dealers and marketing partners can see a better response from holiday incentives is to shift their traditional media strategy to a programmatic audience one.

Successful programmatic strategies are based on truly understanding their in-market shopping audience. However, just because a consumer is shopping for a car online doesn’t mean they can purchase it. For example, first-time buyers may have no idea if or what they can afford, and these waters have been muddied further by the pandemic economy. They may be shopping for a vehicle online without knowing if the payment fits into their budget or if they can get credit. Dealers and their marketing agency partners need to identify several intent signals, as well as financial capacity to target consumers who have:

• Income and assets: an anonymized estimate of household wealth based on data from trusted financial institutions
• Discretionary spending ability: a household’s spending power after accounting for the fixed expenses of life
• Credit capacity: estimated ability to obtain credit to purchase a car
• Propensity to buy: interest in your vehicle segment, make or model

With these strategies in place, dealers can better leverage today’s advanced target-marketing resources to make the most of their holiday shopping incentives and offers this end-of-year season.

Editor’s Note: As Senior Vice President and General Manager, Byron McDuffee leads Equifax's Automotive Services team. In this role, he provides strategic direction in aligning the Equifax automotive solutions team with the company’s broader vision for business transformation and program evolution, enabling automotive dealers, lenders and industry partners to maximize revenue potential. 

1: https://www.autonews.com/sales/supply-crunch-still-hampering-sales-recovery

2: https://www.bloomberg.com/news/articles/2020-09-15/total-holiday-spending-seen-rising-this-year-despite-covid-19

3: https://insight.equifax.com/4-new-marketing-trends-in-financial-marketing/