Exploring the intersection of AI and automotive finance, Stephen McDaniel from F&I Sentinel discusses how dealerships can adapt to evolving technology and streamline processes. The episode covers Waymo's expansion into Detroit, the impact of rising auto loan delinquencies, and the resilience of the auto finance market. McDaniel emphasizes the importance of accurate data in F&I transactions and how integrating origination and cancellation services can enhance efficiency for lenders and dealers alike. Insights into the challenges and solutions in the industry make this a timely discussion for automotive professionals.
Waymo brings its autonomous ride-hailing service to Detroit as the company expands testing in cold-weather markets. Meanwhile, dealership employees brace for the rise of artificial intelligence as automation reshapes jobs across the industry. Plus, our own John Huetter sits down with Stephen McDaniel, CEO of F&I Sentinel.
"Today on the show, Google's self-driving taxi service, Waymo, is coming to Detroit."
Waymo is a company that builds cars that can drive themselves, and they are starting to offer rides in Detroit.
Waymo is a subsidiary of Alphabet (Google’s parent company) that develops autonomous vehicle technology and operates a commercial self‑driving taxi fleet in select cities.
"Plus, F&I Sentinels' Stephen McDaniel talks to our own John Hutter at the Auto Finance Summit in Las Vegas on how lenders and dealers are solving F&I data challenges by validating products earlier in the sales process."
F&I is short for Finance & Insurance. It's the part of a car dealership that helps people get loans and buy insurance when they buy a car.
F&I stands for Finance & Insurance, the department in a dealership that handles vehicle financing and insurance products sold to customers at the point of sale.
"...medium and heavy‑duty executive order tariffs on medium and heavy‑duty trucks that Trump signed a few weeks back."
These trucks are big vehicles used for moving cargo, like delivery trucks or tractor‑trailers. They’re bigger and stronger than regular cars.
Medium and heavy‑duty trucks are commercial vehicles designed for transporting goods. They range from large delivery vans to tractor‑trailers and are larger and more powerful than passenger cars.
"And that basically is this expansion of parts that are subject to the auto tariffs. This extends to light-duty vehicles, not just medium and heavy-duty trucks."
Auto tariffs are taxes that a country adds to cars and parts it imports from other places. They make those vehicles more expensive for buyers.
Auto tariffs are import taxes imposed by a government on vehicles and vehicle parts coming from other countries, affecting the cost of production and sales.
"for 3.75% of the value of the MSRP of the vehicles that they make in the US"
MSRP is the price a car maker suggests you pay for a new vehicle. It’s the starting point before any sales offers or rebates.
MSRP stands for Manufacturer’s Suggested Retail Price, the price a car manufacturer recommends selling a vehicle for before any discounts or incentives.
"...makes it explicit that yes, you are able to claim other parts as auto parts. And yeah, I think a lot of automakers kind of welcome that."
Auto parts are the pieces that make up a car, like tires or brakes. Here it means those pieces can be treated as official parts for tax purposes.
The term refers to any component or accessory that can be installed in a vehicle, such as brakes, tires, or electronic modules. In this context it highlights that certain components can be classified and taxed as automotive parts.
"And yeah, I think a lot of automakers kind of welcome that. It's sort of, again, a further extension"
Automakers are the companies that build cars. They’re happy about the new rules being talked about.
Automakers are companies that design, produce, and sell motor vehicles, such as Ford, Toyota, or Volkswagen. The speaker notes that these companies are generally supportive of the policy changes discussed.
"It's sort of, again, a further extension of some of the auto tariff relief"
Auto tariff relief means the government is cutting or removing taxes on car parts that come from other countries. This makes them cheaper for manufacturers.
Auto tariff relief refers to reductions or eliminations of import taxes on vehicle parts and components. The executive order mentioned is expanding these tax benefits to more items.
"backed by Cox Automotive, helping you drive qualified leads and close deals faster"
Cox Automotive is a company that helps car dealers use technology to find customers and sell cars more easily.
Cox Automotive is a large automotive technology and services company that provides digital solutions for dealerships, including data analytics, marketing tools, and inventory management.
"you saw California pass the CARS Act recently, the California CARS Act. And so they're drilling down..."
The CARS Act is a California law that makes car makers give more safety and repair information to people who own cars. It helps keep cars safer and makes it easier for owners to get help when something goes wrong.
The California Automobiles Reimbursement and Safety (CARS) Act is a state law that sets standards for vehicle safety, emissions, and consumer protection. It requires manufacturers to provide certain information and support for vehicle owners.
"what is a traditional OEM base warranty going to provide and what is the overlap in coverage"
When you buy a new car, the maker promises to fix certain parts for free if they break within a set time or miles. That promise is called the OEM base warranty.
An OEM (Original Equipment Manufacturer) base warranty is the standard coverage that comes with a new vehicle, typically covering parts and labor for a set period or mileage. It defines what the manufacturer guarantees without additional paid extensions.
"Is that something out of like a dealer tracker or route one?"
Dealer Tracker is a company that makes computer programs for car dealers to keep track of their cars, sales, and customers.
Dealer Tracker is a software company that provides dealership management and inventory solutions, helping dealers track sales, financing, and service data.
"Is that something out of like a dealer tracker or route one?"
Route One is a company that sells software to car dealers so they can manage their inventory and customers more easily.
Route One is a provider of dealership software solutions, including inventory management, customer relationship tools, and finance/insurance (F&I) modules.
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Welcome to Daily Drive for Monday, November 4, 2025.
I'm Kellen Walker in Las Vegas.
Today on the show, Google's self-driving taxi service,
Waymo, is coming to Detroit.
How to navigate AI at the dealership.
And more Americans are falling behind on car payments,
but lenders say the overall outlook
for auto finance remains strong.
Plus, F&I Sentinels' Stephen McDaniel
talks to our own John Hutter
at the Auto Finance Summit in Las Vegas
on how lenders and dealers are solving F&I data challenges
by validating products earlier in the sales process.
And so what challenges we've seen
is a lender knowing whose product they financed.
Let's run through all the news you need to know
to keep up in the auto industry.
Waymo, Google's self-driving taxi company,
is expanding its ride-hailing service to Detroit,
its sixth U.S. market.
The rollout will start with human drivers
before transitioning to fully autonomous rides.
Waymo has tested vehicles in Michigan's snow and ice
and will deploy all-electric Jaguar I-PACE
and Zeker RT models equipped
with the new Waymo driver system.
The move marks another step
in the company's broader expansion
and underscores Detroit's growing role
in next-generation mobility
as it rebuilds its economy around technology and innovation.
In a new automotive news column,
staff reporter Mark Homer reflects
on the rise of artificial intelligence
and what it could mean for retail automotive jobs.
As AI takes on more tasks,
from answering calls to managing customer outreach,
experts say some back-office jobs
could disappear within a few years.
But industry leaders say the key is to adapt, not resist.
Cox Automotive's Marianne Johnson puts it plainly,
your job might not be replaced by AI,
but it could be replaced by someone using it.
The message for everyone in the business?
Learn the tech, lean in, and stay ahead.
And finally, despite a rise in auto loan delinquencies,
experts say the U.S. auto finance market remains resilient.
About 5% of borrowers were at least 90 days late
on car payments in the second quarter.
Rising prices and higher interest rates
are straining some budgets,
especially among some prime borrowers,
yet most consumers are keeping up.
And even amid affordability concerns,
new research shows middle-income Americans
are feeling more financially confident,
with many still planning to buy a vehicle in the next year.
And those are today's headlines.
You can find more details on all those stories
at autonews.com.
Now joining me to talk more
about the Trump administration's expansion
of parts subject to auto tariffs
and what it means for automakers and suppliers
is John Irwin, who covers suppliers and supply chain
for us at Automotive News.
John, welcome back to Daily Drive.
Thanks for having me back.
All right, John, so what are some of the main details
of the expanded auto parts list?
Yeah, this stems from the medium
and heavy-duty executive order tariffs
on medium and heavy-duty trucks
that Trump signed a few weeks back.
And basically, when you dig through it,
there's kind of a piece in that order
that kind of went a little under the radar
compared to maybe some of the other news items in there
about the new tariffs on trucks
and relief that automakers were getting.
And that basically is this expansion
of parts that are subject to the auto tariffs.
This extends to light-duty vehicles,
not just medium and heavy-duty trucks.
On the one hand, there are now more parts
that are on that list.
This includes some touchscreen displays and speakers,
more engine components and that sort of thing.
That's courtesy of S&P Global and analysis that they did.
But I guess maybe even more,
potentially a bigger deal beyond that
is a section in this executive order
that basically allows companies,
when they're importing a part,
to basically certify that that part
is subject to the auto tariff,
even if it's not explicitly on the list of parts
that are subject to the auto tariff.
This is something that I think a lot of automakers
and suppliers have been asking for for a while.
There are a lot of parts that are used in vehicle assembly
or even for repairs that aren't on that list.
And because they're not subject to the auto tariffs,
maybe they would instead be subject
to 50% steel and aluminum tariffs
or reciprocal tariffs on different trading partners,
which could range anywhere from 10% to 50%.
So if you're on the higher end
and that part is subject to a particularly high tariff,
whether it's from steel and aluminum
or those reciprocal tariffs,
because it's not on the auto parts tariff list,
you might be paying more
than you would have had it been on there.
Plus, when you look back at the relief
that the Trump administration has extended
to automakers for the next several years,
for 3.75% of the value of the MSRP
of the vehicles that they make in the US,
that reimbursement that they're getting
is only supposed to cover auto parts tariff costs.
So if you're bringing in a part,
but it's technically not on the auto parts tariff,
maybe at that point,
you're technically not allowed to use that relief
as it relates to any tariff costs for that part.
But now you're able to claim it
as part of the auto parts tariff.
The Customs and Border Protection
recently put out a few days ago,
some guidance on how automakers
and any importer of these parts can go about doing that.
It's similar to how they would do it
for a part that is on the auto parts tariff list.
Yeah, it's a pretty significant change
and it could have some pretty big ramifications
for automakers and suppliers.
So John, are automakers now slightly
kind of sighing in relief and how are they reacting?
Yeah, I think that's fair to say.
I mean, like I said earlier,
I think a lot of automakers and suppliers
have sort of been pushing for this.
There was a little bit of,
I don't know if confusion's the right word,
but there was kind of a lack of clarity
on whether this was something
that they would be able to do,
but this executive order from a few weeks ago
kind of makes it explicit that yes,
you are able to claim other parts as auto parts.
And yeah, I think a lot of automakers kind of welcome that.
It's sort of, again, a further extension
of some of the auto tariff relief
that they've been pushing for for the past several months.
We're still talking about tariffs that are,
costs that are pretty high here,
but maybe the bill isn't quite as large
as companies were expecting several months ago
before we had the extension of tariff relief,
before some of the deals with the EU, Japan,
that lowered the auto tariff rates
on imports from those countries to 15% and 25%.
So I think there's at least some,
a little bit of a sigh of relief from automakers that,
okay, maybe the bill for tariffs
isn't going to be quite as high as we were expecting.
This is another form of relief, I guess,
to a degree for automakers and suppliers
looking to maybe cut back on some of the costs
that they're having to pay
because of all these new tariffs.
Perfect, good stuff.
John Irwin covers suppliers and supply chains
for us at Automotive News.
John, thank you so much for joining me.
Thanks for having me.
Coming up, inconsistent dealer data
is creating headaches for lenders and product providers.
Steven McDaniel from F&I Sentinel
breaks down how combining origination
and cancellation services can streamline F&I processes.
That's next on Daily Drive.
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Welcome back to Daily Drive.
I'm Kellan Walker.
F&I product management is evolving
as lenders and dealers tackle data challenges
across origination and servicing.
Inconsistent dealer-entered data
often blocks accurate lien holder notifications
and complicates validation.
By moving checks to the point of sale,
lenders, dealers, and product providers
can streamline processes and reduce friction.
Stephen McDaniel is CEO of F&I Sentinel.
He spoke with our own John Hutter
at the Auto Finance Summit in Las Vegas
about how combining originations
with cancellation servicing has helped lenders
ensure products deliver real consumer value.
You know, it's been a while since we talked.
Just talk about some of the, you know,
initiatives you guys are at with F&I Sentinel.
I think we, last we talked,
I think you had just started the launch
or you bought perhaps the, you know, the refund.
Yeah, yeah, yeah.
Exactly.
So, you know, last time we talked,
we probably talked about how the company
really started on the origination side of the house
for the lenders,
and then we quickly saw a need
to assist on the cancellation side.
And so that was the reason we made the decision
to acquire Express Recoveries from Cox.
It was just an opportunity for us.
And we felt like we had a better mousetrap
if we combine the two with originations
with the servicing side.
And it's turned out to, I think,
have been a pretty good gamble by us.
When it comes to the cancellation side for lenders,
solving that problem,
we think it's really been done
almost incorrectly.
We think if you know kind of what came in the portfolio,
the ability to service it as it's leaving the portfolio
makes things a heck of a lot easier.
And so combining those two solutions
has really been a game changer
for a lot of the lenders we work for.
And it's resonated for those that we don't.
Yeah.
It just came from a session
where we talked about how the challenges at servicing
can really be solved at origination.
So getting those two units within a lender together
to talk about the problem,
it's really been eye-opening for the lenders.
Other aspects of the servicing
besides just the cancellation issue on the products, or?
Certainly there's some of them.
So the lenders also want to know
if the products are performing for the consumers
at the end of the day, right?
So there's a reputational aspect to it,
especially with like a gap waiver
that becomes the lender's product.
Yeah.
So knowing that that product is going to provide value,
you know, you saw California pass the CARS Act recently,
the California CARS Act.
And so they're drilling down,
at least in the state of California,
as to whether or not the products provide value.
Interesting.
So a lot of what we do on the origination side
is to make sure that they are providing value.
And so when you talk about servicing,
it's not only the refunds,
but is the product performing for the consumer?
That's interesting.
Do the lenders get claims data or something like that?
Or how do you, I guess, how do you track that?
So really what we do is at the origination side,
we do what we call credentialing.
So we look at the coverage within the product.
We will compare it to the lender's minimum requirements.
Sure.
Make sure that it's going to provide
at least a certain amount of value.
Also kind of take a look at
what is a traditional OEM base warranty going to provide
and what is the overlap in coverage
and other additional benefits being offered.
One of the things that we've looked at a lot
is prepaid maintenance.
A lot of OEMs are offering more and more
prepaid maintenance with the purchase of a new vehicle.
Sure.
So we want to make sure that there's additional benefits
being provided through maintenance agreements
that are also upsells or purchases.
Are you finding any, I guess, kind of any issues that,
I guess, dealers or lenders need to watch out for
on prepaid maintenance plans or?
You know, it's more about the data challenges right now.
So what we have found is that we look at three stakeholders.
We might've talked about this last time we talked.
So we've got dealers, product companies, and lenders.
Right.
With consumers at the middle of that triangle, if you will.
And so what the challenges we've seen is
a lender knowing whose product they financed.
Yeah.
Because a lot of the data that gets put
on the finance agreement is coming from the DMS.
And in that case, many times that's a free form field
that dealers are populating.
And so we have multiple product companies
with 600 different instances of what gets printed
on the finance contract.
Oh, you're kidding.
Like a single company or whatever.
Yeah.
A single company.
I'll pick on one.
Yeah, okay.
Great company, but JM&A for example.
Yeah.
Dealers will enter.
I'm not kidding.
We have 666 different JM&A, JM spell out and,
or Fidelity Warranty Services.
Same with product companies like Protective, US Warranty.
So a lot of that challenge for lenders is to know
whose product did we finance?
So if there is an issue, how do we call them?
So we try to help solve for that.
We're doing some integrations with some of the platforms now
that will help pass the correct data
to really kind of dealer-proof it,
make it easier for the dealer.
So they don't have to make sure they're looking at,
okay, in the state of Alabama, it's company A,
but in the state of Oklahoma, it's company B,
because those F&I products,
the payee will change depending on the state.
So a lot of that is data
that the lenders have never had visibility into.
That's really interesting.
Yeah.
Okay, so you guys are working like with just the DMSs
where it'll kind of, I don't know, auto-correct it
or suggest like, okay, do you mean that,
kind of like, I don't know,
what it'll do with like an address on an autofill form.
Did you really, did you mean this or, you know?
Yeah, so primarily focused on econ,
because that's kind of where everybody wants to go.
And so when we get called to ask who is,
whose company is this product being sold?
And so we will pass the data back,
which will then transfer into the loan origination system,
which will hopefully handshake
with the servicing platform for the lender,
which streamlines it for everybody.
I mean, one of the challenges that we've also seen
for the product industry is that many times
they won't have the correct lien holder listed
on their F&I product form.
So it kind of goes both ways.
Same thing, a lot of that is free form fields
that are entered by the dealers.
And so, you know, you'll see Hyundai Capital
entered five different ways.
And so knowing who that lien holder is by region, by state,
it's very important for the product companies as well.
When there's a cancellation,
they need to be able to notify the lien holder,
hey, that product is no longer on that loan.
So tying all those parties together in the disparate data,
that's really kind of what our goal is
for all of those individuals
that are involved in the transaction.
Kind of on the cancellation thing,
are you seeing pretty good buy-in
from the product providers on, you know,
on alerting the lender or, you know?
Yeah, so I think what we have heard,
again, it's the data challenge,
is we've heard from product companies,
hey, we'd love to notify the lien holder.
We have concerns that we don't know
who the correct lien holder is.
And when we notify a lien holder,
and if it's the wrong lien holder,
we're sending PII to a lender
that may not hold the contract.
Right, right.
And so as long as we can make sure
that they know that they're sending it
to the correct lender,
I think that's what they're looking to do.
Because I think all the parties in the transaction
want it to go seamlessly.
Sure.
But when you don't have the accurate data,
that makes it difficult.
Like you said,
this is something you guys have been working on.
Do you have a kind of a sense of where it,
when it goes to market, so to speak,
or when it's, I mean, is it something like,
is this like a 2026 thing?
You guys will have it kind of standardized or?
For our lenders that we do the originations work for today,
they get standardized data, how they ingest it.
What we're trying to do,
most of our lenders that we work for
on the origination side,
they're doing it at the time of funding.
Sure.
The problem with that is,
the dealer's already sent the package to the lender,
and now if they're validating at that time,
at the time of funding,
if there's an issue,
they're sending it back to the dealer.
Dealer's got to bring the consumer back in.
It creates friction.
So what we're trying to do is push that validation check
further left in the workflow, we call it.
So we're shifting it left
to where it's being done at the point of sale.
Okay.
So if that's the case,
now it all ties together.
Is this like at the credit application?
Correct.
Okay, versus the funding?
Correct.
So if it's done at funding,
it's being done through the loan origination system,
which we have integrations
with some of the loan origination providers.
We're moving it back
to when the consumer's in the dealership.
So if there is an issue,
the dealer is able to correct it right then and there.
Sure.
Versus having it being done at the time of funding.
And I would say,
from the partners that we're working with,
we're hoping that we're looking,
worst case scenario, midpoint of 2026,
where it's all integrated all the way back.
I mean, we're currently doing it
for seven of the top 10 lenders today.
Okay.
That's being done at the time of funding.
Okay.
Does anyone else in the industry
want to push it further to the left?
Sure.
No, that makes sense.
And is that doable from a dealer perspective?
I mean, that you should be able to handle that,
or is it something where they, you know?
Yeah, we think so.
Okay.
So today, dealers have the ability
to pick what form they're sending.
Yeah.
Part of the problem is,
is they don't know which is the correct form to send,
depending on the lender.
Right.
Some lenders have different requirements
for different product types.
And so sometimes the dealers are guessing.
Our goal is to kind of make it a no-brainer.
Sure.
We know we're sending this to lender A.
These are the products that lender A accepts for funding.
Yeah.
So if it's done there in the F&I office,
it kind of dealer proofs it, if you will.
Yeah.
While they want to do a seller VSC,
we just want to make sure they're selling the right VSC
for that particular lender.
Where does that, just because again,
I'm not in the trenches working on this.
Where do they get the, I don't know,
notification or that, oh, this is the one.
Is that something out of like a dealer tracker or route one?
Is it through their F&I menu system or the DMS?
Where do they?
So preferably it'd be done in like a dealer tracker
or route one where they're kind of putting the deal together.
I mean, that's the preference for most folks
that we talk to as we do it there.
Sure.
That would be the big goal.
And then that way the data validation
can all happen at the time.
I mean, we see a lot of mismatches too,
between the finance contract
and the actual F&I product form.
So the term might be listed incorrectly
on one or the other
and we wanna make sure they're consistent.
Stephen McDaniel is CEO of F&I Sentinel.
He spoke with our own John Hutter
at the Auto Finance Summit in Las Vegas.
That's Daily Drive for today.
I'm Kellen Walker.
Thanks to Tierra Riddick, John Irwin,
and Mark Homer for their help on today's podcast.
You can get the latest news on auto finance
and US consumer trends,
how to navigate AI at the dealership
and everything happening in the auto industry
at autonews.com.
Come back tomorrow to learn more about Slate Auto
and their plans for repair shops as it relates to EVs.
You know, Slate Auto does have backing
from Jeff Bezos and a bunch of rich people,
but they are trying to make a 25, 26, $27,000 car.
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