F&I Product Selling Tips for Gen Z

Traditionally, the Finance and Insurance (F&I) department has focused on appealing to a broad range of consumers with a one-size-fits-all approach. However, the rise of Generation Z shoppers demands a shift in the strategy of selling F&I products. Gen Z is coming of age and beginning to slide into the driver’s seat. While this generation follows those that precede them in prioritizing price as the biggest motivator for what vehicle to buy, they follow their own path when it comes to protecting this very large purchase. That difference can influence how F&I departments provide value to these young buyers.

The key to working with the evolving preferences of Gen Z consumers is to understand their mindset. According to a recent CDK study, over 65% of Gen Z shoppers trust the F&I manager over a salesperson when it comes to receiving guidance or recommendations related to purchasing post-sale products such as vehicle service contracts. This gives those in F&I a great leg up in the sales process; however, there’s still room for improvement! Here are a few tips to help F&I managers connect better with Gen Z customers.

Highlight Vehicle Sustainability

Although Gen Z shoppers are price-conscious, they’re surprisingly highly motivated by sustainability when considering F&I products. This environmentally conscious generation is likely to opt for a used car and keep it running longer to minimize its environmental impact.

Ally research found 71% of the 18-to-40 demographic said they’d rather buy a used vehicle than a new one — and cited sustainability over price as a reason for their decision.

It also means that Gen Z customers who desire to keep vehicles longer to lessen the environmental impact should consider buying F&I coverage. The average age of a vehicle in the US was 12.5 years in 2023 and is projected to keep climbing higher. Dealerships should think of sustainability as a driver of F&I sales. If a customer wants to keep their vehicle for as long as possible, they may be interested in a vehicle service contract from the F&I office.

VSC’s can extend a vehicle’s lifespan by covering mechanical breakdowns, potentially reducing the need to replace a vehicle prematurely. F&I professionals can leverage this growing interest in sustainability to position VSCs as an investment in vehicle longevity and ecological responsibility. As a result, Gen Z motorists mitigate premature auto replacements, effectively reducing waste headed to landfills and lowering their overall environmental impact.

Focus on Value, Not Just Price

Gen Z are facing economical issues and are concerned about financial stability. Over 50% of Gen Z is worried about not having enough money. A lack of savings is a perfect reason to steer these consumers toward F&I products and to warn them against waiting until a major vehicle component has issues.

During F&I presentations, showcase security and protection products to address Gen Z’s concerns about vehicle safety and reliability. Don’t just list the features; paint a picture of the peace of mind these products offer.

  • Place emphasis on how a GPS tracker or window etching can deter theft attempts and provide valuable information for recovery in case the worst happens
  • Frame protection products as an investment in financial security (covering future repairs) as your car ages and longevity (extending the vehicle’s lifecycle)
  • Protection products, such as a vehicle service contract, can save thousands of dollars down the road by covering unexpected repair bills. Point out specific components, like the engine or transmission, that VSCs typically cover and emphasize the rising cost of parts and labor.

Less is More

A key tactic is to avoid overwhelming Gen Z buyers with too many F&I options. This generation is bombarded with information online – they spend an average of over 4 hours a day on social media! F&I departments need to avoid contributing to the overload. A sweet spot of one to two products presented well will greatly maximize the likelihood of a purchase.

During F&I consultations, offer products based on the buyer’s needs or budget. For example, if a young buyer purchases a used car, a VSC and theft protection plan is a good package. Explain the benefits of each product clearly and allow them time to ask questions.

For a new vehicle purchase, a tire and wheel protection plan alongside a prepaid maintenance package would suffice. This grouping covers unexpected damage to expensive components while ensuring the vehicle receives routine servicing to extend its lifespan or resale value.

Reach Gen Z Online

Gen Z consumers are digital natives, constantly connected and exploring online. Social media feeds and reviews heavily influence their buying decisions, and F&I products are no exception. A robust dealership web presence is necessary for reaching this techie generation and teaching them about the benefits of products from your F&I department.

Most dealerships neglect to promote F&I products on their website in favor of vehicle listings. Publishing relevant F&I information outlining coverage options and benefits like repair cost protection and highlighting how VSCs promote vehicle longevity will educate customers who are researching online before walking into the dealership.  At the very least, dealers need to dedicate a space on their website to a contact who can assist customers with F&I-related questions.

Dealerships already have an advantage with the trust Gen Z consumers have in the F&I department. Now F&I departments can use these tips to help close more sales are generate revenue for the dealership through those customers.

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Drivers are keeping their vehicles longer than ever before – in the United States, average age of vehicles on the road has reached a record high of 12.6 years. This trend stresses an unavoidable reality: maintaining a vehicle’s health to ensure reliable transportation is more important than ever.
Keeping an older vehicle running smoothly is sometimes challenging, and the older the vehicle gets, the more likelihood there is of a mechanical breakdown.