April 3, 2025
How integrating insurance into car sales boosts revenue, loyalty and satisfaction with customers at dealerships.
Everyone was talking about how insurance rates impacted auto sales in 2024. It’s true that rates have risen to unprecedented levels. What’s also true is that insurance doesn’t have to kill the deal. In fact, auto insurance can be a deal maker and even a deal sweetener. Let me explain.
Rising insurance costs could actually help dealers save buyers money when they need it most — during the deal. That could help them sell more cars.
Here’s why. Car shoppers are more aware than ever of the total cost of ownership (including insurance), they want a fully integrated dealership experience (again, including insurance) and they are even willing to spend more on F&I if they get insurance in the dealership. Dealerships that adapt to these expectations can close more deals.
Polly’s 2025 Embedded Auto Insurance Study reveals consumer expectations about insurance in the car buying process are changing and changing fast, but also that might just be a silver lining for dealers.
Pocketbook Pressure
Today’s buyers are focused on total cost of ownership. In fact, cost of insurance ranked above vehicle brand and new technology features when buyers were deciding which car to buy. What may be surprising is that 52% of all buyers and 69% of millennials and Generation Z buyers said they would buy a nicer vehicle or upgrade their vehicle if they could save about $75 on insurance while in the dealership. So, while buyers are feeling pressure in their pocketbooks, they’re still open to spending more on their cars if you can save them money elsewhere.
Convenience is King
An all-in-one shopping experience is becoming non-negotiable for car buyers. Buyers value a convenient experience, where they can address both their car purchase and insurance needs in a single transaction. 84% of millennials and Gen Z said they would feel better about their dealership experience if it included an embedded auto insurance solution. They want a seamless approach that not only saves time but also builds trust and increases customer satisfaction.
Unlocking Insurance’s Hidden Potential
Insurance can even be a game-changer for F&I profitability. According to the study, 85% of buyers purchased at least one F&I product after being introduced to insurance options during the car-buying process, compared to only 53% when they were not offered insurance, and almost three quarters of millennial and Gen Z buyers said they would purchase extra protection products if they could save money on insurance. When dealerships integrate insurance discussions early and effectively, they create opportunities to sell extended warranties, GAP insurance and other high-margin products — driving higher overall F&I gross.
Loyalty, Loyalty, Loyalty
Loyalty makes or breaks your dealership. So, what better way to drive customer loyalty than to save them money and provide a complete experience during the car deal. Dealers who offered insurance solutions to their customers could see stronger satisfaction ratings and increased referral rates. 82% of millennials and Gen Z said they would recommend a dealership that includes embedded insurance options, and 81% of these buyers indicated they would return to the same dealership for maintenance and repairs. Insurance could be a missing link that strengthens the customer-dealer relationship.
They Expect Tech
Millennials and Gen Z are digital natives, and dealerships need to keep pace. The study revealed that 88% of these younger buyers prefer to shop for insurance on their phones during the car-buying process. This tech-first mindset underscores the importance of offering digital insurance solutions that are quick, transparent and easy to use. For dealerships, investing in these tools is no longer optional — it’s the cost of doing business in 2025.
Insurance Can Make or Break Deals
Buyers are prioritizing affordability, convenience and technology like never before, and that means your insurance solution (or lack thereof) can make or break deals. Dealerships that meet these demands will not only enhance the car-buying experience but also unlock new revenue streams, build long-term loyalty and stay ahead in an increasingly competitive market. And as consumer preferences evolve and financial pressures continue, integrated insurance won’t just be an opportunity for savvy dealers — it will become a necessity for dealerships. It could even become a deal maker.
Article originally published on AutoSuccess
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