All Ears Podcast | Rising EV sales and what it means for F&I.

Gabe Garroni, Senior Vice President of Insurance Sales for Ally, discusses ways sales and F&I can address customer concerns regarding EVs and promote services and products that protect electric vehicles at the dealership.

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Jackie Charniga: Hi everyone, this is Jackie Charniga with Automotive News and welcome to the All Ears Podcast. This podcast is sponsored by Ally Financial and is produced by the Automotive News Content Studio. In each episode, we delve into topics important to executives in automotive retailing. We tap Ally’s leaders to share their expertise and knowledge to help dealers and others successfully navigate transformational changes in the industry. Today, we catch up with Gabe Garroni, Senior Vice President of Insurance Sales for Ally. We discuss ways sales and F&I might address customer concerns over EVs and promote services and products that protect electric vehicles at the dealership. Hi Gabe. Thank you so much for taking the time.

Gabe Garroni: Thank you for having me Jackie. It’s a pleasure to be here.

JC: Automakers will be launching a slew of new EV models in the next few years. Researchers say the next wave of EV buyers will be different from the early adopters already in the market. These new EV shoppers will look to dealerships for more guidance on buying and owning an EV. How might an F&I office get ready to answer questions and provide help to these new shoppers, especially in how to consider service contracts and F&I products for EVs and any potential concerns about depreciation?

GG: That’s certainly something Jackie that we’ve been thinking about for quite some time as you as you watch the proliferation of electric vehicles entering the market and expanding. Early adopters certainly would behave in one fashion as we get into a wider range of consumers. I think what we’re going to see and what dealers are going to see is they’re going to behave similar to our ICE customers in so much as it’s still a mode of transportation, it’s still my family’s vehicle, for example. I still have concerns about the mechanical well-being of the vehicle, the resale value of the vehicle, potentials for total loss. When you look at the suite of products offered today, they still match that consumer very well. The fact that it’s an electric vehicle doesn’t change it materially. But what I will say is it’s important that we understand the subtle nuances and the differences in what those customer concerns might be beyond regular transportation. The first thing that comes to mind is range anxiety and certainly the different technology systems, infotainment systems and connectivity of an electric vehicle. You’ll find that the market will respond and that, for example, Ally has gone on to have a dedicated electric vehicle suite of products to address those specific needs.

JC: In discussion of what EVs require, some say that it’s less maintenance for parts of the vehicle, but potentially they will need completely new types of services like battery maintenance. How might current products change or evolve as EV penetration increases? And do you see any new services or F&I products on the horizon in an electric future?

GG: On the immediate horizon, I can tell you that we just introduced a vehicle service contract designed just for electric vehicles. It does address battery coverage that might extend beyond the manufacturer’s warranty as well as the propulsion systems and motors in the vehicle that do make them unique to ICE vehicles. With regards to additional coverage and services, it’s true that the maintenance will be different. You certainly wouldn’t be selling an electric vehicle customer oil change, for example. They don’t require it, but those vehicles are still going to need regular maintenance. It’s important that we maintain our vehicles. You look at filter changes, other fluids, tires, brakes, suspension systems, these are all services that dealers are going to have available to their customers. Early research also shows that electric vehicle customers are more likely to return to their selling dealer or to a manufacturer dealer for those services versus independent repair facilities. I think there’s actually an opportunity to engage with these customers and ensure they understand what’s available to them at the dealership and what’s required of those vehicles.

JC: Along the vein of where customers will be taking these vehicles with more complexity, EV owners, as you mentioned, are more interested in going back to the originating dealership for maintenance and care. And I’m interested in drilling into what you just said about how dealers can take advantage of that fact with their customers, especially when it comes to emphasizing to EV customers the importance of keeping up with maintenance and retaining good service records. I’m interested in what you think dealers should be saying to these customers, especially in terms of fighting depreciation and maintaining this complex version of their car.

GG: I’ll go back to my earlier statement that you’re going to see a lot of…we move beyond the early adopters and what’s interesting about early adopters is they tend to be experts about what they’re adopting. They they’re very interested, they’re tech savvy. But as you as you expand out into those consumers that are willing to look at electric vehicles as the vehicles become more affordable, and maybe you have those customers that aren’t necessarily doing quite as much research, it’s important that we help educate our customers as to what those differences are. It starts at the dealership. It starts at the dealership personnel, being a student of the experience, being a customer ourselves, understanding on our own time, how their maintenance schedules differ, and how our particular dealership can offer those services with exclusivity, with expertise. I think really that’s the major advantage is being kind of good stewards of that experience and ensuring our customers are taken care of. They may not even understand what questions to ask so we have to be that student first, educate ourselves first so that we can then educate our customer.

JC: How might dealership sales and F&I teams in particular address that thinking in terms of working together proactively when it comes to customer concerns?

GG: When you take a step back and you look at the products offered in F& I, it’s an insurance product and insurance really just is a way of addressing what sort of underlying risks and concerns I have as a consumer. Those might be financial risks, risk of inability to use something. When you think of your homeowner’s insurance or other types of insurance policies, it’s the same concept. I will continue to insist that it’s not dramatically different for electric vehicles. I still have three main kinds of risks. I have credit risk associated with in the case of a total loss. If my vehicle’s a total loss and I still owe money in the form of a loan, there’s risk there and there’s a gap product that addresses that risk. There’s mechanical breakdown or failure for the vehicle to operate as its design and that’s where your vehicle service contracts and entire in wheel protection products come into play. And then there’s some other risks associated with the appearance of the vehicle which matters for depreciation and there’s a slew of products. As we evolve into a larger offering of the vehicles themselves, as we move into a larger consumer base that is varied from the early adopters, we will continue to learn and we will continue to adapt to those customers by offering the right suite of products, product bundles that make sense for their particular areas concerns. As an administrator, we’re doing the same thing. As we gather more information on performance, on how these products perform, we will continue to evolve as well in the coverage that we offer.

JC: That’s it for this episode of the All Ears podcast. A big thank you to Gabe for providing those insights on behalf of Ally and the Automotive News Content Studio, thanks for listening. 

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