July 22, 2025
Polly reports 84% of Gen Z and millennial buyers want the option to buy insurance during a vehicle sale – and many say they'd also buy more F&I products if they save on insurance.
Reports indicate offering insurance during a vehicle purchase boosts a dealership’s finance and insurance income. To be sure, embedded insurance, as the practice is known, may be desirable to some buyers, but dealers worry it will annoy customers more than it helps them.
“I would say (embedded insurance) would make the car buying process easier, but at the same time, everything we do is through iPads and electronically, so it is extra fast,” Carlos Cardenas, finance manager at Germain Toyota of Naples, FL, tells WardsAuto.
Adding the extra step of shopping for an insurance policy might slow the deal, and “the biggest thing the customer complains about is time,” he says.
Germain Toyota does not offer embedded insurance, though sometimes the salesperson will help a customer find insurance, usually with a broker with whom the salesperson has a relationship, says Cardenas.
A minority of customers don’t already have auto insurance when they are buying a vehicle, he adds.
Pent-up Demand?
A study by Polly Insurance suggests offering embedded insurance can boost a dealership’s F&I income. Polly is an embedded insurance marketplace that allows a car buyer to compare different insurance offers before purchasing a policy.
Polly’s Q1 2025 Embedded Auto Insurance Report found dealerships offering embedded insurance quotes saw 21% higher F&I gross. The report for Q2 showed almost the same increase. When a customer actually purchased insurance as part of the vehicle buying process, F&I gross rose 28%, according to Polly.
The reports comprise survey data looking at $1.1 million-plus transactions across 147 dealership groups. Dealers quoting insurance saw a 21% lift in F&I gross and a 28% lift when customers purchased a policy, reports Polly.
Of course, the insurance is not part of the dealership’s F&I offering – dealerships are generally not authorized insurance agents.
The additional expenditure on F&I products arises from the customer saving money on insurance, posits Mike Burgiss, Polly’s chief marketing officer.
The insurance purchase generally occurs while the customer waits to go into the F&I office, he explains. The salesperson introduces the customer to the Polly tool, which is accessible through a mobile phone.
After answering a few questions, the customer receives a text with different insurance offers from national brands. They can also speak with an agent.
When asked if they would like the option to buy insurance while buying a vehicle, 66% of all those surveyed said they would. Gen Z and millennial shoppers were especially enthusiastic; an overwhelming 84% responded positively, reports Polly.
In the same survey, 73% of Gen Z and millennial respondents say they would buy extra vehicle protection products if they could save money on insurance compared to 56% of all respondents.
Embedded at Carvana
In 2022, online used car retailer Carvana partnered with Root Insurance to offer embedded insurance to Carvana customers. The offer occurs as Carvana buyers finalize their online purchase, Christina Keiser, executive vice president, strategy at Carvana, tells WardsAuto via email.
The insurance purchase process involves just three clicks, she says.
Carvana decided to offer insurance to make car buying more convenient for customers, says Keiser. She declines to say whether offering embedded insurance has boosted Carvana’s F&I business.
Instead, Keiser says Carvana transparently and conveniently provides access to products and puts the customer in control “of selecting what is right for them.”
Curbing Wait Times
Carvana’s embedded insurance process takes place online, like the rest of the transaction, so the buyer isn’t sitting around waiting in a dealership. At a bricks-and-mortar store, adding more time to a transaction is a real negative, according to CDK’s 2025 Friction Points Study.
The study, conducted in September of 2024, surveyed 1,281 consumers who had purchased their vehicle in the previous six months.
The likelihood a customer will recommend the dealership – the Net Promoter Score – is highly impacted by the amount of time a transaction takes, according to CDK. The shorter the wait time, the higher the NPS.
Article originally published on WardsAuto
Author: Alysha Webb, Contributor, WardsAuto
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