It’s impossible to escape this fact. In every publication, including Automotive News, there is at least one article pointing to Millennials as the fastest-growing car-buying population in the United States. By 2020, they will make up about 40{137f86425451f0eed4391b215cab1f0aedcc26ced4aeb45d9a5267c3194b8614} of the entire U.S. vehicle market.

So, what exactly does this mean for the sales process, and more specifically, what does it mean for F&I?

One interesting fact in the AN article is that as a group, Millennials are buying cars out of necessity, rather than passion. They are graduating from college, starting their careers and starting families — and all of that requires reliable transportation. They are also, for the moment, making far less than Baby Boomers or even Gen X are, so on average, they are skewing more toward compact and sub-compact options, in the $35,000 or less range.

Change is on the horizon though. Experts are noting that as Millennials continue to mature, they are starting to see the breadth of brands and models this generation gravitates toward is expanding. And, say the experts, like every generation that came before them, continue to adapt their car buying habits as their lifestyles and incomes change — making way for the next generation to move in and shake things up.

What is different about the Millennial generation is they are the first to have grown up with technology literally at their fingertips from birth. They are just as — if not more — comfortable with researching, negotiating and buying everything from toilet paper to houses through a screen. And that applies to the automotive market as well.

So, what does this mean for F&I? First and foremost, it doesn’t mean rushing out to invest in the latest, shiniest tool in the box. “New” doesn’t necessarily mean “better,” a mistake that many early adopters have discovered. It also doesn’t mean throwing out everything we know about how to sell F&I products successfully, or even about the products themselves. They are just as valuable to Millennial buyers as they have been to every generation before them — and we have to sell those products to them, the same way we’ve always sold.

The difference is in the approach.

One interesting thing an F&I and Showroom article notes, is that buyers who use smartphones are, typically, more educated and more affluent than their peers. This means that not only do these buyers want more details about the products they are purchasing, once they see the value, they are more likely to invest.

Another point to consider in the F&I office is that, according to an article in Auto Dealer Monthly, many Millennials are choosing to finance their cars through other options than the dealership, which means F&I managers are going to need to start rethinking the product presentation. One way of doing this will be to incorporate using apps at dealerships that enable the customer to simply pick up an iPad to start the process, and with the F&I manager’s guidance select the products best suited for them. This falls back on execution and training given to our F&I departments, emphasizing the importance of technology in closing sales with Millennial customers. Millennials do actually see the value in the products, notes Automotive News, since they have grown up in an era where they don’t think twice about purchasing protection for their big-ticket purchases — consider the success of the Apple Care program. And that mentality will carry over to cars, as well, but F&I managers will have to continue finding ways to present the products outside of the traditional financing conversation, such as putting more information about the products online.

In terms of what products Millennials are likely to be attracted to, vehicle service contracts will be a popular option, as they have grown up seeing their parents struggle through the 2008 Financial Crisis, and themselves graduated from college in a time when high-paying jobs can be hard to find, coupled with high student loan payments that are coming due. They are financially aware, and products that ensure they will be protected from huge, unexpected repair bills will have high value. Also, as the LA Times points out, Millennials are attracted to technology — they, more than any other car-buying generation to date, are more concerned with how the vehicle connects to their lives than they are with safety features. F&I products that enhance or protect those high-tech systems are going to be the most interesting to this population.

Also to note for dealers and providers across the spectrum, this is further validation that we need to educate consumers where they want to learn: online. That doesn’t mean we need to overhaul the sales system, or replace F&I managers with kiosks or tablets. But it does mean we need to start making the information available for this generation who is used to having the answer to every question they could ask at their fingertips, and present it in a way that makes it clear the products are designed to help protect their investments.

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This post was written by: Garret Lacour, CEO RoadVantage

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