This year, maybe more than ever, consumer affordability should be at the forefront of products agents connect auto dealers with.

As the average new-vehicle transaction price approached $49,000 at the end of last year, interest rates remained elevated, and the number of existing under-water consumer auto loans was growing, it was clear that the finance-and-insurance office would be key to maintaining and growing sales and retaining customers in the new year.

Luckily, emerging technologies and old-fashioned industry innovation are available to help agents meet that need for their dealer-clients.

From nontraditional products to reconfigurations of foundational offerings and the simple act of refocusing on basic consumer needs, agents have a full menu of options to guide dealers through the challenges of today’s thin wallets.

Meanwhile, increasingly technology-savvy consumers are looking for the latest creations to help make their mobility easier.

We talked with several product providers to get their insights on which product categories are likely to meet both types of needs this year with the right solutions. 

For starters, EasyCare CEO Tony Wanderon said agents should take the time to update their product mixes to provide short- and long-term value to customers.

Low-Cost Offerings 

Perhaps at the top of the agent’s list of adjustments this year is the task of ensuring products are priced right and add value for the end customer, the providers we talked to said.

Tweaking rates to adjust for the increased cost of parts and other prices is essential now. 

“In the past, companies may have focused on new product design and development. In the past year and a half there has been readjusted pricing structures based on the risk associated with that structure,” Wanderon said. “Customers are keeping their cars longer … To use services is more important than building that uber product.”

Offerings, including ancillary programs, that fit crunched consumers’ budgets are essential, agreed Mike Connelly, vice president of business development for Wise F&I. 

“Whether it’s a giveaway, short-term ancillary products like a one-year paint-and-fabric preload, or service contracts with lower exposure, such as tech-only programs, these low-cost offerings will see increased demand as customers look for more effective ways to protect themselves,” said Connelly, who emphasized products that fit a niche or short-term need in order to better fit tight budgets.

Those can include a service contract that adds packages such as service-and-brake-pads or service-and-maintenance to cover both certain needs and uncertain needs, including mechanical breakdown.

“I foresee parts programs being among the most talked de FI offerings in 2025,” he said.

Affordable products that help protect customers’ investments will help dealers retain customers, added Joe Nuszkowski, vice president, head of product at Protective Asset Protection. 

“And with that, service contracts are always a good investment for consumers because they protect the vehicle, protect against the unforeseen. With rising labor and parts costs, they’re a good investment for customers and for dealers in retaining those long term.”

Maintenance programs can help dealers meet consumers “where they are in terms of intervals of service for what their real needs are and what the vehicle’s needs are,” Nuszkowski said.

“The average age of a vehicle on the road is over 12 years now. It’s the longest we’ve seen. You want to make sure customers maintain their vehicles long term,” he said. “Dealers want to make sure the vehicles are maintained to the OEM specifications.”

Nuszkowski agreed, saying, “Fundamentals are always key in our industry and continue to provide positive results.” 

Several product providers said agents should guide dealers in packaging value-added programs as why-buy-here offerings.  

For instance, “A life-time warranty or a tire-and-wheel or maintenance program, ‘If you bring the vehicle back to our store, we’ll do a basic or extended maintenance for you,’” Wanderon explained.

Tailored and Updated Coverage

The product specialists said they also see demand building for more custom-designed offerings that fit consumers’ unique circumstances. That includes gap coverage.

“In a post-Covid world as the values of new and preowned cars have come down, the gap severity has increased to among the highest-ever levels,” Connelly said. “As a result, the industry will ponder new ways to accurately price and provide coverage for customers. I predict you will see different companies come up with different price structures based on the amount financed and the term – more granular than we’ve seen in the past,” he said.

“Gap contracts will begin to move from a one-page, prepriced-level service offering to a multifaceted pricing model based on all sorts of factors, from amount financed, the term or the interest rate.”

For electric vehicles, protection products will likely be evolving this year due to the still-emerging nature of the segment, Wanderon predicted. 

“Many of the programs currently available have seen slow consumer adoption, with a significant portion of EVs being leased," he said. "I believe we'll see a wave of new and innovative approaches to coverage, including bundled stand-alone electronics protection packages. Additionally, it will be critical to educate consumers on the high costs of repairs will play a crucial role in shaping their purchasing decisions."

Tech Talk

Speaking of technology, product specialists say there are plenty of options that can up dealers’ game for today’s consumer.

Joseph Pesce, CEO of TecAssured, said he’s seeing more such products surfacing that consumers find practical for their situations. 

What’s called direct-to-consumer technology and self-service sales models applicable to any type of product can help dealers increase business, he said. The products and the demand rose during the Covid pandemic shutdowns but are even more relevant, now that consumers have become accustomed to digital shopping.

“We’re seeing a steady increase in this particular type of sales happening more and more,” said Pesce, who explained that dealers can reach customers via QR codes on dealership literature, links in dealer surveys, or by using a third party to remind customers to get oil changes.

The dealership can send the consumer an email that directs him or her to a webpage where they enter their vehicle’s information and get product recommendations, along with payment options, he explained, and lenders can include products in auto loans.

One change Wanderon said would be beneficial for dealers is online finance-and-insurance preapprovals.

"Customers should have the opportunity to explore F&I products and determine which options make the most sense for their specific driving habits risk appetite," he said. 

"Traditionally, this process didn’t begin until they entered the F&I office. However, with the shift toward digital engagement, we’re moving toward providing customers with personalized options based on the information they enter online at their convenience."

Nontraditional Products

Though foundational programs like service contracts and gap coverage are perennial musts, the abundant market innovation the auto industry is experiencing continues to add first-of-their-kind offerings that can fit unique needs.

Pesce named a protective covering for vehicle electronics and a dash-mounted or app-based legal guidance service for drivers involved in incidents on the road, whether a crash, DUI or other occurrence that might call for professional guidance. Both come with dealer reinsurance program opportunities due to the warranties connected with the products, he said.

Agents as TPAs

Finally, more agents themselves are finding a deeper role to play as more start providing some products to dealer-clients themselves instead of serving only as middle people.

Due to more cost-effective technologies and wider insurance availability in the space, Pesce’s company is seeing more agents converting to third-party administrator status.

“I remember 20 years ago, it was difficult for independent businesses outside of larger TPAs, to get started, and technology was so expensive,” he said. “Now prices have come down, making it much more feasible to run a two- to three-person operation efficiently and cost-effectively.”

In such a scenario, an agent could independently manage a tire-and-wheel program, gap coverage or a specialized product, earning their own administrative fees without depending on a third party to handle claims.

“You can get insured and control your own destiny with that, then sell it because it becomes a commodity,” said Pesce, who said larger TPAs are always looking for enterprises to acquire. He pointed to last year’s APCO Holdings purchase of two such agent-created TPAs – Capital Administrative Professionals and Rider’s Advantage.

Hannah Mitchell is executive editor of Agent Entrepreneur. A former daily newspaper journalist, she honed her craft covering politics, business and more for publications that included the Charlotte Observer and the Orange County (Calif.) Business Journal. She holds a master’s degree in journalism from Columbia University, and her first car was a hand-me-down Chevrolet Nova.