Assurant advises car dealers on EV F&I

While consumers understand the basic concept of an EV — that it runs on electricity instead of gasoline — most don’t know much beyond that. How EVs work and what parts are more prone to wear and tear still is largely unknown to consumers.

According to a recent Consumer Reports national survey, more than one quarter of Americans say they would not buy an electric vehicle, while just 9 percent say they are “very” familiar with the fundamentals of owning an electric-only vehicle — with familiarity highly correlated with the likelihood of buying or leasing an electric-only vehicle. This knowledge gap presents an opportunity for dealers to become a resource for EV education.

The reality is while EVs require less maintenance than a typical ICE vehicle, the parts are often interconnected and may be expensive to repair. This may sound like a turnoff for your customers, but it is an opportunity to educate them while underscoring the value of your F&I offerings.

Customer education about the nuances of buying, driving and maintaining an EV vs. an ICE vehicle should be presented throughout a buyer’s journey. Ideally, the sales staff’s ability to discuss EVs with customers sets up the F&I department to continue the conversation. Of course, before those teams can confidently (and legally, ethically and compliantly) advise consumers on EV ownership, they’ll need comprehensive training. That’s a critical first step.

Once trained, both teams will better understand — and be able to articulate — important information about the high-tech components found on today’s EVs, including:

  • Lithium ion battery
  • Electric motor(s)
  • Regenerative braking system
  • Charge connector cable
  • Battery management system
  • Charge connector
  • Complex navigation and entertainment systems
  • Emerging ecosystem of other electrical services

Modern EVs still are new to the market and their long-term durability is relatively untested. Service contracts present a significant opportunity for dealers to provide customers with the peace of mind that their vehicle is covered for major mechanical issues.

Ideally, F&I departments will be able to offer coverage that protects against failure of the lithium ion battery, as that is one of the most expensive components to replace. As more EV lease turn-ins come back to the dealership and show up at auction, battery protection will be a critical offering to help put buyers of used and certified pre-owned vehicles at ease.

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