Twelve years ago, dealer Lou Bregou engineered the F&I department, but not its function, out of the dealerships he manages as part of Driver’s Village near Syracuse, NY.

Last year, he sat on a prestigious F&I industry panel at odds with industry experts talking about online F&I processes.  

At 65, Bregou has seen good – and bad – years in car sales. He just doesn’t see how the industry’s push to online F&I sales will produce good fruit for dealers. 

Worried about an erosion of backend revenue, he says “price transparency will make it very hard to make $1,000 and more on products consumers know they can buy elsewhere for less.”

If selling F&I profitably online proves as difficult as he suspects, the hardship will most affect dealers who rely heavily on F&I to support their store’s bottom line.  

“Consumers will still buy products online, but as transparency has done with car pricing it will erode F&I margin too,” Bregou says.

Driver’s Village is a 15-franchise operation inside a converted shopping mall.  When Bregou scrapped the traditional F&I office, he put in place a model that consists of the following:

  • Deal structuring, finance and leasing handled by sales managers.
  • Sales specialists selling aftermarket products. Bregou’s theory is the salesperson knows the customer best and is the most appropriate staffer to present products of the most value to a particular buyer.

After demo drives, Driver’s Village customers are escorted to one of three “settlement offices.” There, delivery coordinator (title clerk) joins the customer and the product specialist to complete paperwork.

Bregou stresses he’s not an expert on F&I issues.

“Look, I don’t have an MBA,” he says. “I ran a food-service business for many years, and the last 32 years I’ve sold cars and operated car dealerships.  We put an F&I office in my first store in 1984 and took it out in 2003.

“We did so because requiring customers to go into the F&I office was never comfortable for them – or our sales team – and it broke up the flow of the sales process. For customers, this change has been a homerun.”

He notes many dealers have since adopted similar models.