The Industry's Leading Source For F&I, Sales And Technology

F&I Products

Turning Objections Into Sales

April 2011, F&I and Showroom - Feature

by Ronald J. Reahard - Also by this author

F&I managers make their living on the word “No,” especially since most of their customers enter their offices armed with a variety of ways to say it. What successful F&I managers understand is that most objections are simply an indication that the customer has yet to believe he or she needs the product — or that its value exceeds the cost. Where they make their money is in their response to those objections.

To turn an objection into a sale, you must first welcome the objection, sympathize and demonstrate an understanding of it through your response, tone of voice and body language. Let’s run through some objection-handling techniques for service contracts and GAP coverage:

3 Common Objections for Service Contracts

Objection No. 1: “With a three-year/36,000-mile factory warranty, I don’t need it.”

The Response: Your “in” is to focus on the customer’s driving habits, especially if the customer drives more than 12,000 miles a year, plans on keeping the vehicle or is financing it for longer than the factory warranty.

F&I manager: I know what you mean. (Toyota) builds a fantastic vehicle. And with that warranty, you are protected for a significant amount of time. Unfortunately, the warranty covers you for three years or 36,000 miles, whichever comes first. And since you drive 20,000 miles per year, you’ll be out of warranty in how long?

Customer: A little less than two years.

F&I manager: That’s why the service agreement is absolutely critical. Because you’re not financing the car for two years, you’re financing it for five, right?

Customer: That’s true.

[Warning: Always ask a trial closing question that will elicit a positive response before going for the close. Assuming a “Yes” before the customer indicates he or she is ready to buy will get you an adamant “I don’t want it!” To a customer, that feels like sales pressure.]

The Close: So, do you just want to go with the preferred option, or would the standard option work better?

Objection No. 2: “I’ll probably trade it in before the warranty expires anyway.”

The Response: Make sure to demonstrate an understanding of the customer’s concern before overcoming this objection.

F&I manager: I understand. If you’re only going to keep it three or four years, you don’t want to buy a service contract for the next owner. Let him buy it, right?

Customer: Right.

F&I manager: Actually, that’s the best thing about this protection. If you do trade, you can cancel the unused portion and get a refund. If you sell it, you can transfer it to the next owner, which turns an “As-is” used car into a pre-owned vehicle with three or four years of coverage remaining, dramatically increasing its value and your return on investment. If you decide to give it to your daughter when she goes off to college, she’ll be covered while she’s away at school. And whether you sell it, trade it or give it to your daughter, you want it to be worth as much as possible, right?

Customer: Right.

[Proceed to the close.]

Objection 3: “That’s why I’m buying a Ford, because they don’t break down.”

The Response: Tread carefully here. Saying the car will break down could cost the dealership the sale. However, agreeing with the customer means there’s no need for a service agreement. Here’s how you proceed:

F&I manager: I understand. That’s why you’re buying a Ford, because you don’t want any problems. If you thought you were, you’d be buying something else, right?

Customer: Absolutely.

F&I manager: I have to agree with you. The new Taurus is definitely one of the finest vehicles on the road today. Hopefully, you’ll never have any repairs. Unfortunately, if you have even a minor problem, it can be extraordinarily expensive.

Customer: Why is that?

F&I manager: Just like every other carmaker, our technicians have become component replacement experts. If the air conditioner only has one speed, you don’t replace the fan switch; you replace the climate control module. That’s why a service contract is absolutely critical. It’s not that you have a lot of repairs; it’s that   they’re a lot more expensive to fix when you do. And you don’t want to buy a climate control module if you don’t have to, right?

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email: