If you’ve spent much time in the F&I office, you understand how difficult it can be to work deals over the phone. So much communication is lost. I try to avoid it. But sometimes you can’t, which is why it’s critical that you be prepared.

A recent customer of mine is the perfect example. In our initial phone conversation, he wanted to compare our finance offers against his bank of choice, which happened to be one of my rivals. He resisted my invitation to drop by the store so I could show him the various plans. He wanted to either bring in a check or be prepared to sign our finance documents with just one visit. To further complicate matters, he also wanted precise information about the various service contracts available.

This customer had vast experience in the field of insurance, so his questions were very precise. You see, he is a retired insurance agent from a well-known company that’s very aggressive in financing their customers. Their agents also solicit them for various protection products and even offer “free” GAP coverage. But that’s a story for another time.

The customer was buying a used F-150 and was armed with a finance offer from his former employer. I submitted his application and worked the lender hard so I could capture the financing. Boom! I got a lower APR and the customer’s undivided attention.

He then wanted a comparison of coverage between our vehicle service contract (VSC) and the insurance company’s “Platinum” plan. Since it was obvious the deal hinged on my being able to provide value with not only the financing but also the service plan, I decided to do some investigating. I asked if I could call him back and, after a few minutes of Google sleuthing, I found the plan he was referring to. Turns out the service contract wasn’t even underwritten by the insurance company he had so much confidence in. So I decided to exploit that fact.

I also discovered the insurance company’s VSC is underwritten by an independent company that isn’t even affiliated with the insurance company offering it. I decided to do some checking around on the secondary company and uncovered an interesting fact about its reputation: The underwriter was rated “A-” by A.M. Best.

I called back and shared what I’d learned. Then I started the line-item comparisons, including the fact that the other plan doesn’t cover fuel injectors, secondary ignition systems, Onstar/Sync systems, tire pressure-monitoring systems or navigation. Navigation coverage is an upsell.

Our service contract product, which has earned an “A+” rating, does cover these items and at a disappearing deductible, providing the customer with greater peace of mind than the competitor’s $100 flat deductible.

The customer quickly opted for my financing and VSC. I’ll admit I probably got lucky. Brand loyalty and familiar faces are usually the only reasons a customer needs to pass on dealership finance offers. But I did my research and it paid off. Now it’s your turn. Here are some tips you might find helpful:

  • Gather intelligence: Drop by your local credit unions and insurance agencies and ask for a copy of their VSC sales brochures and enrollment forms.
  • Read and compare: How many times have you heard me say, “Readers are leaders”? Read through the literature and pore over the enrollment forms to see how your competitors’ plans stack up.
  • Be smart but not a smart aleck: Carefully and wisely use what you’ve learned to underscore the value in your product. Don’t waste too much time tearing down the competition.
  • Keep it handy: Drop your gathered materials into an easily accessible folder for future use.

Listen, more and more insurance companies are offering your customers F&I products because they see the residual value. Service contracts, GAP and credit insurance are the main targets. But those are our products. Margins are thinner now than at any other time in history, and we have to protect the bottom line and give every customer the protection they deserve.

Remember that insurance agents have a distinct advantage. The business relationship they have with your customer probably goes back years. Now comes a stranger from a car dealership vying for his or her business. Whom do you think the customer is more likely to trust?

You’re not going to win them all, but you won’t win any if you don’t try. Arm yourself with knowledge of the competition and take the wins. And celebrate when you can, because customer loyalty usually trumps good sense. Good luck and keep closing!

Marv Eleazer is the F&I director at Langdale Ford in Valdosta, Ga. Email him at [email protected].

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Marv Eleazer

Marv Eleazer

Finance Director

Marv Eleazer is the finance director for Langdale Ford in Valdosta, Ga.

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