February 2012 - Feature

Closing the Gap

Get a complete breakdown of a GAP objection-handling technique insurance companies don’t want you to know about.

By Tony Dupaquier

Guaranteed asset protection is one of the most popular products sold in the business office. Until recently, the only place a customer could enroll in a GAP policy was at the dealership. Today, dealers face stiff competition from insurance companies, which, by offering their own product, have fostered an objection F&I managers now face all too often: “I can buy GAP from my insurance company.” We in the business refer to it as the “primary” GAP objection.

Direct-to-consumer product sales represent a real threat to your bottom line, but GAP is one product where dealers have the edge. The policies offered by insurance companies tend to fall short in two areas: paying toward the deductible and maximum
compensation. That means you need to come up with some straightforward terms for describing the difference between the product you carry and the one your customer’s insurance company offers. Now let’s take a look at two things you can do to stop and even overcome your customer’s go-to GAP objection.

Heading Off the Objection

One way to reduce the chance of encountering that primary GAP objection is to make sure your salespeople aren’t asking customers to contact their insurance provider before entering the business office.

It’s a great service and it definitely is an emerging practice at dealerships, but helping customers get their new vehicle on their policy as soon as they commit to a purchase will only stop the F&I office in its tracks. Not only does it provide insurance companies with a chance to redirect the customer’s financing somewhere else, it allows them to sell their own service contract and GAP products to your customers.

Now, when a customer states that he or she can buy GAP from his or her insurance company, always begin by acknowledging the customer’s choice and his or her understanding of the product. At that point, you want to pull out a piece of paper and write down the difference. Now, here’s a line you can use to do just that:

“It’s great that you are aware of the benefits of GAP. However, there are several important differences between the GAP policy available here and the GAP that your insurance company has presented to you. It is your right to consult with any GAP provider to determine which benefits are best for you and at what cost those benefits can be obtained.”

Explaining the Differences

One of the main differences between the policy you offer and the insurance company’s version is that yours is a standalone policy. The one offered by your customer’s insurance company is most likely a rider policy to his or her primary insurance. Should the customer choose to purchase GAP from the dealership, his or her policy will remain intact regardless of whether he or she switches insurance providers, who’s at fault, and the limits of liability. The customer also may be protected from a significant deficiency in the event of a total loss. Now, let’s take a look at two key differences between these policies:

• Deductible: Most GAP policies offered at the dealership pay an amount toward the customer’s deductible, usually up to $1,000. Most insurance company policies do not pay any amount toward the customer’s deductible.

• Maximum GAP Payout: Regard-less of who is at fault, the GAP policy sold at the dealership may pay the deficiency up to the maximum amount listed on the contract.

Now, depending on the contract you sell, the maximum amount payable can range from $25,000 to $50,000. To grasp this point, it takes some understanding of how automobile insurance works and the limits of liability.