«When a customer contacts someone live and asks to buy a service contract, no one takes their contact information. F&I managers are too busy and customers end up buying coverage elsewhere. «Always start the discussion about the service plan early, preferably at the time of installation or sale of the facility. If you leave it too long – until the warranty has expired or is about to expire – leave it too late. By starting the discussion early, you can ensure a smooth transition between installation, warranty, and service plan. Also, be sure to renew the service plan earlier. You should contact your customers a few months before their service contract expires to reassess their needs and refine their plan. Given that buyers of the Honda brand believe that their cars will never break down, offering them extended service warranties seems like a lost thing. The ability to sell extended auto warranties is a lucrative skill. Knowledge of the psychology behind selling protection plans, as well as a basic sales pitch and rebuttal, are useful for any extended warranty sales pitch. Conversely, understanding this information is also useful for potential buyers who are negotiating an extended warranty. Here are some useful tips: As with new cars, service contracts for used vehicles are calculated based on the level of risk taken by the administrator. That said, service contracts for used vehicles have the same «value» as for a new vehicle.
Let`s start with the most common misconception in the automotive industry; that you can purchase an extended warranty for your vehicle from a third party. You can`t. Believe it or not, there is actually no «extended warranty» for a car, truck, or SUV that comes from a third party (not the manufacturer or dealer). If your existing vehicle is already covered by the manufacturer`s warranty, this is a good reason not to sign a vehicle maintenance contract. As mentioned earlier, this point is about your personal risk tolerance. Instead of selling a vehicle service contract, you should position it as vehicle health insurance to help buyers make a better connection in their minds and understand the final value more easily. In addition, the length of the vehicle`s ownership cycle has increased significantly in recent years, and factors such as longevity (18%) and repair costs (15%) are close to cost (23%) as the most important decision-making factor. The actual value of a sale occurs long after the first order has been received. The actual value results from the service contract. This comparison allows buyers to see that when it comes to unforeseen vehicle health issues, auto insurance doesn`t offer the same type of coverage (auto insurance is really more than vehicle life insurance).
The use of the term auto health insurance encourages consumers to recognize VSCs or extended warranties as a long-term investment to protect their vehicle`s assets throughout the life of the property. If the customer brings an older vehicle that has had a lot of problems or complains about the reliability of their current vehicle, take the opportunity to talk about their frustrations and offer a solution with an extended car warranty. That being said, it`s important to understand that different vehicles fall into different categories or «classes» for pricing. For example, an all-new Toyota Camry is classified in Class 1. A vehicle maintenance contract for this vehicle will be really cheap. However, a vehicle service contract for a used BMW i3 will be incredibly expensive as the i3 is a Class 9 vehicle (the highest on many administrator scales). Another sales technique he suggests in treating resilient customers who think their newly purchased vehicles are safe for repair: ask them if they would buy a car without a factory warranty. As you can see, this extended warranty actually extends the manufacturer`s warranty to the vehicle. Unlike a third-party automotive service contract, the manufacturer`s extended warranty is an extension of the warranty. Traders who aren`t serious about selling service contracts outside of the F&I office are missing a lot of money, says F&I veteran Jeff Amegod.
The process of getting a covered repair for your car with an extended aftermarket warranty can also be inconvenient. Often, car owners have to pay for the service out of their own pocket and have to wait for refunds from the supplier later. If it is a third party, be aware that they are not selling you an extended warranty for the powertrain, but an extended service contract that covers the vehicle`s powertrain. There is a difference between the two. You know it`s a third party if the name on the contract is not the company name of the dealer or manufacturer. Note that the user refers to vehicle service contracts as extended warranties. As you know from reading above, these contracts are not extended warranties, no matter what many people call them. That being said, their advice is fair.
There are a few common reasons why people don`t buy vehicle maintenance contracts. Assurant Solutions` research sheds light on the most common reasons why people avoid paying for service contracts. Keep all your service records, regardless of who is running the service. These include oil changes, tire rotations, belt changes, new brake pads, and inspections. Create a file to track repairs – it will come in handy if you need to claim your warranty. If you ever have a warranty claim and it appears that you have not maintained your vehicle, your claim may be denied. «It has to be someone who is good at building relationships and who is good at sales techniques,» says Amegod. «Customers are conditioned to say no to everything in the R&I office. But in the service route, they do not go to someone`s office; they do not close the door. .
I like an accessories and warranty department. Most dealers do not execute a warranty [service contracts] after the sale. And they don`t really advertise accessories. While similar to manufacturer`s warranties, third-party extended warranties are actually vehicle maintenance contracts. For extended warranties of aftermarket cars, you are not limited to using the dealership`s repair facilities for maintenance. Instead, with most extended car warranties, you can have your vehicle serviced at any ASC-approved repair shop in the country. While flexibility in choosing your preferred repair facility is an advantage, one of the disadvantages of aftermarket extended warranties is that OEM parts are not always used for covered repairs. No two vehicle maintenance contracts cost the same amount of money.
This is because vehicle maintenance contracts are «evaluated» based on the Vehicle Identification Number (VIN) and vehicle mileage (an industry term for price). This is in their best interest: be sure to tell the customer that it is not part of a required service pitch. They`re not just trying to make money with them, as it`s something that can help them save money and extend the life of their vehicle. In addition, extended warranties increase the value of the vehicle`s final result. «You can also offer zero percent financing for a service contract. Many traders don`t seem to know that this exists. It is of the utmost importance to use certain marketing techniques. «A vehicle maintenance contract is nothing more than that; a promise between two parties that describes how and when the administrator will pay for certain repairs to a vehicle.
In particular, a vehicle maintenance contract is not an extended warranty. We will discuss the differences between the two below. Ultimately, if you`re able to negotiate a fair price for a vehicle maintenance contract for a new car, it can definitely be worth it. Would we recommend spending thousands of dollars on a vehicle maintenance contract for a new Toyota Camry? No way! The value is simply not there. However, if you are offered the same contract for less than a thousand dollars, it could represent a value for you. Buying a vehicle maintenance contract for a new car depends entirely on you and your risk tolerance. And as always, read the contract before signing! Vehicle maintenance contracts are quite easy to understand. This is a contractual agreement between you (a car owner) and a third party (called an administrator). What value do you have as a car owner from a vehicle maintenance contract? The Administrator agrees to pay for certain repairs or services for your vehicle for a certain period of time (or distance travelled) as described in your contract. Don`t give your customers a choice between everything (at an exorbitant price) or nothing at all.
Service contracts are affordable because they represent a single annual expense, as opposed to sporadic, unpredictable and potentially costly maintenance and emergency visits. Still, your customer`s service may not have the budget for a revamped service contract, and that shouldn`t be their only option. Don`t let your customers bleed to death. Adapt your service plan offerings to the customer`s budget constraints. If they need more practical help but don`t have the budget to do so, prioritize specific service solutions and manage the surplus. .
