F&I and Showroom, January 2018

www fi magazine com 32 F I and Showroom January 2018 SO HERES THE DEAL T This months video question comes from Brandon in Houston home of the World Series champion Astros Brandon writes So heres the deal Some of our vehicles are older and have higher mileage How do you sell a service contract for 3000 when the car costs 8000 The objection from the customer is theyll take their chances over paying that extra 3000 Brandon selling a vehicle service contract on a high mileage vehicle can be a challenge The cost of a VSC on these vehicles is proportionally much greater than a service contract on a new car in this case almost 38 of the price of the vehicle Quite frankly at that price a lot of people would choose to take their chances Yet as we all know buyers of high mileage vehicles are three times more likely to use a VSC than have a major claim on their medical dental or car insurance We also know that the older the vehicle and the more miles on the odometer the more likely a part will fail or something will break The key is determining which level of coverage will provide them with a reasonable amount of protection based on the vehicle theyre buying That means you may need to see what lower cost plans your other VSC providers offer or you may need to consider adding a second or third provider that specializes in limited coverage for older highmileage vehicles You may also need to offer a plan with reduced coverage a shorter term fewer miles or a higher deductible Unfortunately you may still be left with a 12 month 12000 mile service contract that costs 3000 on that 8000 used Audi turbo diesel with 170000 miles That is going to be a tough sale but everybody benefits if that customer leaves with at least some level of protection on that used vehicle The key is to create some curiosity about the VSC before you attempt to discuss why in your customers case it might be especially important Creating interest and then responding to their questions is far more effective than forcing them to listen to a sales pitch If the customer declines the service contract after youve reviewed his or her options on the menu you can create interest by making a statement like I do find that surprising especially since you are buying a vehicle built in 2008 This can lead you right into a discussion about component parts and the fact that if the vehicle breaks we cant fix it You can also use the buyers guide from the used car theyre buying to create interest in the service contract Before having them sign the back of the guide make sure the customer reads the checked box that states A service contract is available at an extra charge on this vehicle Ask for details as to coverage deductible price and exclusions If you buy a service contract within 90 days of the time of sale state law implied warranties may give you additional rights Once they ask about what coverage is available educate the customer Make sure you convey the fact you dont fix anything in your service department anymore You have component replacement experts This is also the perfect time to hand the customer an electronic component like a door control module or an anti lock brake computer and say Every vehicle is now made with component parts You cant fix the part that fails You have to replace the entire component So if your gas gauge quits working you dont replace the gauge you replace the instrument cluster If your fan switch quits working you dont replace the fan switch you replace a climate control module Thats why repairs on todays vehicles have become so expensive because technicians have all become component replacement experts And a six speed electronically controlled automatic transmission is going to be expensive to replace The most important part of the F I sales process is still discovering the customers needs before presenting your products Customer needs are the foundation upon which you have to build the sale of every F I product That requires open ended questions and engaging the customer in a dialogue throughout the F I process to enable both you and the customer to answer that all important question Why do they need a vehicle service contract Until and unless you can answer that question they wont buy it Brandon thank you for your question Your YETI is on the way And dont forget to submit your own question for a chance to get it answered and receive a free YETI Because its a beautiful day to help a customer or play ball ABOUT THE AUTHOR Got a question or objection for Ron Use your mobile phone to record a brief video shot landscape style of your question and upload it to go reahard com ask ron Selling High Mileage VSC Plans How do you sell a 3000 VSC on an 8000 car Top trainer offers a fourstep process to ensure every customer gets the protection they need BY RON REAHARD THE MOST IMPORTANT PART OF THE F I SALES PROCESS IS STILL DISCOVERING THE CUSTOMERS NEEDS BEFORE PRESENTING YOUR PRODUCTS CUSTOMER NEEDS ARE THE FOUNDATION UPON WHICH YOU HAVE TO BUILD THE SALE OF EVERY F I PRODUCT