Current estimates put roughly one million electric vehicles on the road in the U.S. today. According to media reports, this milestone was achieved just a few months ago. Proponents of the technology agree that this is a small number, compared to the more than 270 million cars and trucks in the U.S., but it continues to grow and has a bright future for those focused on lowering their carbon footprint.

EV cars and trucks are obviously built with different technology throughout – particularly in the engine components – which means servicing these vehicles can be different from traditional gas-powered cars and trucks. It can be more difficult for auto dealers to recommend the right F&I products for EV cars and trucks because they are inherently different from traditional gas-powered cars and trucks. These inherent differences make it important for dealers to understand how to effectively communicate with their customers, as well as understanding the different types of F&I products that best serve these vehicles.

The right F&I sales process today has evolved over the years. The process is no longer about stacks of blank contracts and the “4 squares” worksheet – the high-pressure environment that once defined the customer experience as frustrating and discouraging. Often, the F&I methodology was a numbers game, and the pressure to meet a quota defined the process from the dealership’s end.

While sales or product acceptance numbers are still critically important when presenting F&I options today, the process has evolved so that customers feel like they’re being educated more about options, and less sold a series of products in a stressful environment. This progressive approach to F&I, coupled with the fact that EV technology is new to many EV buyers, means an educational approach is ever more important in the F&I office.

F&I options for EVs need additional education and explanation for customers. This explanation stems from the different types of vehicles in this category. Looking broadly at the types of EVs, there are electric vehicles which are fully electric from a battery; hybrid vehicles which have a combination gas and electric-powered engine; a plugin hybrid which allows a driver to plug in the vehicle for an additional charge of the battery. A fourth type of alternate engine that is becoming more common today is the mild hybrid, which is a gas-powered engine that has an automatic start-stop of the engine when the car is not in motion, such as sitting at a red light.

It is important that F&I managers have full comprehension of each type of vehicle, and it is therefore critical they can properly explain the differences in warranty coverage and service contract options to the customer.

This will only grow in importance as the world of alternate fuel vehicles grows and likely becomes more complex.

According to IHS Markit, the share of EV cars and trucks is expected to reach 7.6% of all new-unit sales by 2026. This compares to just 1.2% of sales in 2018. What’s more, 18 models were available in 2018 and this expected to grow to 133 by 2026.

The emphasis of coverage and F&I service contract options depends greatly on the type of vehicle the customer just purchased. Manufacture warranties provide a different emphasis of parts, depending if it is a gas-powered or battery-powered vehicle. What’s more, while manufacture warranties on gas-powered vehicles cover bumper-to-bumper components and powertrain, alternate fuel engines come with additional coverage for hybrid parts and the batteries.

To make sure the F&I function continues to help dealerships drive financial success, it is important to take a consultative approach to any additional coverage or vehicle service contract options, especially if the customer plans to put a significant amount of miles on their alternate fuel vehicle, or if they are planning to own the car for a longer period of time. Repairs and replacement parts/battery can be three times the cost of a gas-powered vehicle, which makes the right protection plan increasingly important.

About the Author

Tim Blochowiak is Vice President – Dealer Sales of Protective Asset Protection, a full service provider of F&I programs offering vehicle protection plans, GAP, ancillary products, training and other services through vehicle dealerships. For more information visit

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Author: Contributing Writer

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