5 Most Profitable F&I Products You Could Be Offering
11 May

5 Most Profitable F&I Products You Could Be Offering

you have two crucial roles: to generate profit for the dealership and ensure that the customer has access to the protection they need for their new investment.

The goal is to offer each customer the value, security, and protection they require for peace of mind, to make the purchase or lease of a new vehicle more attractive. Many dealerships are failing to maximize their F&I department’s potential for profitability by ignoring key pieces of coverage and auto protection that they could be offering to buyers.

1. Vehicle service contracts

Service contracts serve as an added layer of protection for dealership-customer relationships. The vehicle service contract is often the first step for car buyers when it comes to safeguarding their new investment. Making yours robust with adequate forms of coverage is key in making it worthwhile for the customer.

Common plan highlights include:

  • Wrap coverage
  • Named component and exclusionary levels of coverage
  • Coverage terms up to 10 years or 150,000 miles
  • ASE certified claims specialists
  • High mileage pre-owned coverage plans
  • Plans that include rental vehicle reimbursement, trip interruption, and emergency roadside service
  • Interest-free payment plans

Most service contract programs can be tailored to your needs and whether you’re an independent dealership or part of a franchise. These contracts generally offer mechanical protection and cover parts, labor, and fluids, along with taxes, which can provide a substantial profit generating tool for F&I departments.

2. GAP insurance

This form of protection lends customers financial assistance in the event of a total loss of vehicle. If their new $20,000 car is totaled and the insurance company only pays out $15,000, there’s a significant loss for the customer. GAP insurance helps alleviate them of the financial burden by paying the difference between the payout and the balance due for the car.


Typical protection through a GAP insurance plan:

  • Up to 84 months of protection available
  • Covers customer’s primary insurance deductible, up to $1,000, where permitted by law
  • Used to waive the debt on a loan or lease in the event of a total loss
  • Protects customer’s credit record
  • Covers vehicles with a loan amount of up to $100,000 at time of purchase

GAP protection kicks in after accident or theft to make sure your customers get back on the road as quickly as possible. By offering GAP insurance, you ensure that the dealer remains the point of contact, which encourages repeat business from the customer.

3. Environmental protection

There’s a lot working against the nice paint job of a newly purchased car — from harsh weather like acid rain and melting ice, to elemental damage from tree sap, hard water, and UV damage from the sun.

Unfortunately, the manufacturer’s warranty almost universally excludes damages caused by these things, and more. Dealerships that can provide customers with environmental protection and warranty covered where the factor won’t, gives you an edge in fostering a stronger relationship with your customers.

Common perks of an environmental protection plan include:

  • 7-year and lifetime exterior/interior warranties
  • No deductible
  • 10 day, $50/day rental car coverage
  • Low cost, high margin non-chargeback program
  • Exterior coverage insures against hard water spotting, environmental damage, road de-icing agents, and paint related problems (overspray and aerosol spray)
  • Interior protection covers seats, floor mats, carpeting, and cargo areas from a range of hazards, including food, vomit, clothing and food dyes, ink, and make-up

4. Road hazard protection

Careful driving only protects drivers so much. For the unavoidable or unseen perils of the open road, there’s road hazard protection. Poorly paved streets, construction debris, and even damage caused by another driver’s carelessness are all considered ‘hazards of the road.’

F&I departments that provide this form of coverage to their customers give them added protection against everyday hazards. Tires and wheels aren’t generally covered under the manufacturer’s warranty, but this protection plan covers drivers instead.


Actual protection plans will vary, but most commonly, they include:

  • Coverage for tires with run-flat technology, curb impact damage, rental car expenses, and repairs/replacement of damaged tired and wheels (including cosmetic wheel damage, but excluding chrome)
  • Protects new and used vehicles
  • Provides unlimited claim benefits, no mileage limitations, and no limit on occurrences
  • No deductible
  • Coverage for the duration of the contract, which is transferable

Dealerships may not be able to protect drivers every mile of their journey; however, road hazard protection goes a long way to covering them against damages the manufacturer won’t.

5. Key replacement

As technology advances and cars take on traits of sci-fi projects, car keys similarly change to become more complex, and thus more expensive. When a customer loses their key, they have to shoulder the burden of its costly replacement. Because many of today’s keyless start and entry systems feature such advanced technology, programmed specifically to each vehicle, replacing them can be a huge hassle.

When customers sign up for a car key replacement program, they can enjoy benefits such as:

  • Having their car unlocked for them
  • Replacement of the car key(s), key fob, or transponder
  • Reprograming of keys, as needed
  • Emergency message relay
  • Towing coverage

People seem to lose keys about as often as they lose their phones, and understanding that the problem is no longer just a minor inconvenience will help you help them, and produce additional income while you’re at it

Providing so many additional coverage and protection plans forces the customer to deal with the dealership, which helps the F&I manager to build a relationship with them. This almost always has the benefit of encouraging the customer to do repeat business with you as they’ve come to trust you, based on the interactions they’ve had with the dealership.

Manufacturers actually protect against very few of the everyday hazards drivers are destined to face. This neglect is what makes it so easy for dealerships to generate that additional income, by offering coverage the factory can’t or won’t.

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