Photo credit: AUTOMOTIVE NEWS ILLUSTRATION

Dealerships’ finance and insurance departments have felt the jolt of major changes in regulations and product offerings, the collapse and rebound of leasing and the arrival and departure of lenders.

But nothing has been as unrelenting lately as the technology revolution.

Within the last decade, especially the past five years, financial technology startups have thrust themselves into the auto retail industry in droves.

They were drawn by the twin lures of potential scale and hefty profits. U.S. new light-vehicle sales have topped 17 million for the last three years. Retailers on Automotive News’ list of the top 150 dealership groups based in the U.S. posted an average $1,412 in F&I revenue per vehicle last year. The fintechs latched onto a lucrative industry.

Experts agree that an auto retail transformation, driven by technology, is inevitable. Exactly what that transformation will look like, and how the industry will get there, is less predictable.

Most dealerships won’t rely on technology alone to lift F&I results. However sophisticated a given technology may be, it lacks the often decades of experience, rapport with customers and legal acumen of well-trained F&I managers — traits that make a well-run F&I department a key profit center for a dealership.

Still, dealerships can benefit from the influx of fintech companies. Dealerships need effective technology to stay relevant and compete with their dealership peers, not to mention the need to provide consumers with an experience that matches what they find elsewhere, such as with Amazon and Apple.

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