More customers buy vehicle-service contracts and are happier doing so if car dealers educate rather than hard-sell them when presenting finance and insurance products, says Ally Insurance President Doug Timmerman.
“If you take an educational approach in the sales process, you’ll be the most effective and the customer experience will be optimized as well,” he says.
Moreover, when F&I managers use a product-presenting menu and learn customer needs early on in order to show them relevant products and services, “it all kind of comes together,” he says. “Customers appreciate it when dealers handle it that way.”
Timmerman offers that advice on an Autoline Spotlight video program presented by WardsAuto and entitled “Selling GAP Insurance and Service Contracts.”
Other program participants include George Glassman of the Glassman Auto Group, Autoline’s John McElroy and WardsAuto’s Steve Finlay.
Glassman stresses the importance of vehicle service contracts because today’s cars are so technologically advanced – making them expensive to fix if something goes wrong.
“They are computers on wheels,” he says, noting automaker warranties typically are limited to powertrains. “It’s important for the customer to know what’s covered (by a manufacturer’s warranty) and what’s not. If an owner plans on keeping the car for a while, it makes good sense to get a vehicle-service contract.”
He and Timmerman also are strong advocates of GAP insurance that covers the difference between what a vehicle is worth and what remains owed on it, if it is stolen or totaled in an accident.
“GAP is a critical component of any (vehicle) purchase,” says Glassman, whose Southfield, MI, dealership group represents Hyundai, Kia and Subaru. “Cars don’t typically go up in value; they never do.”
He cites a potential situation in which an insurer pays $20,000 for a total-loss vehicle claim, but the outstanding loan on it is $25,000. Without GAP, claimants are on their own to pay the difference. Glassman says, “The bank is going to say, ‘Where’s our $5,000?’”
Offering GAP “isn’t a sales tactic,” he says. “It is critical customers understand it and take advantage of that coverage.”
Timmerman adds: “If you get customers to think about that, you put them in a better position. It’s a win-win.”
To see the full Autoline Spotlight video, click here.