Chargeback Prevention

Since the magazine posted my “Unwinding a Deal” column online nearly six years ago, I have fielded countless questions and concerns from distressed car buyers. Not many have centered on something that happened in F&I — that’s until the following note landed in my inbox this past December:

“I am a customer of a dealership here in Texas, where I bought a couple of products in the F&I department. Call it buyer’s remorse, lack of faith in the products sold, or whatever, but I’m feeling like I don’t want them. Can I cancel these products? What will that do to the deal? Will it affect my payment? If I can cancel them, how do I do so?”

"Listen, there are many reasons why a customer may want to cancel a product. Maybe you were busy on the day of the delivery and didn’t fully explain the product’s conditions. It could be the sales process took too long before you met the customer and she tuned you out. Whatever the case is, it’s incumbent on you to revisit the benefits of the products and re-establish the customer’s buying motive."

Ugh, right? Aside from advising him to return to the dealership, I replied with this: “I’m sorry to hear you’ve changed your mind. I own most of the products I offer customers on my cars as well as my family’s cars. I would strongly suggest you reconsider the service contract and GAP protection, because these offer some serious coverage that could impact your financial status.”

I don’t know what compels people you’ve adequately and thoroughly closed on a product to change their mind after the fact, but it happens. So with that in mind, the following are four common reasons customers give for wanting out of a protection plan as well as my responses to their objections. Feel free to make them your own or email me with your go-to responses.

Reason No. 1: “Things went so fast that I wasn’t thinking about the actual price of the coverage, and it’s too much.”

Response: “I can appreciate the way you’re thinking, because it is a lot of money. The reason it’s priced this way is because car repairs are expensive. Even a small item such as a wheel bearing can cost hundreds of dollars. And who wants to be without transportation or pay for a rental when your car is tied up waiting for a tech to do the repair?”

Reason No. 2: “My brother-in-law is a mechanic and told me these things almost never break.”
Response: “Let me share something with you: The factory-trained technicians in our service department have this protection on their cars because they see firsthand how much repairs cost. In fact, most of the work done back there is paid for by these plans. Another cool benefit is the roadside assistance and trip interruption, which would take care of your family if a problem arose while on vacation.”

Reason No. 3: “I can get oil changes done cheaper elsewhere.”

Response: “I can see your point, but we’re talking about much more with this maintenance plan, including rotating and inspecting your tires, performing a multipoint inspection every time you come in, and checking with the manufacturer’s service intranet. This invaluable resource is usually restricted to dealerships and can provide critical information that can head off potential problems if caught in time. Plus, in order to keep your factory warranty intact, it’s best to have your car maintained by trained technicians who are familiar with your car. Think of it as a warranty compliance plan.”

Reason No. 4: “My insurance agent told me I don’t need your GAP because his is cheaper.”

Response: “Well, none of us want to overpay, and I don’t blame you for thinking like this. But before you cancel, make sure you actually read the coverage he’s offering, because you get what you pay for. See, many GAP programs insurance companies offer have limited-time coverage and only pay a specific amount toward the deficiency. Our GAP product will pay up to 150% of MSRP or NADA retail. It will also reimburse your deductible up to $1,000. Also keep in mind that the insurance company may be tempted to not declare your vehicle a total loss if it’s borderline to prevent their GAP provision from kicking in.”

Just remember to be calm and to remind the customer how valuable those programs can be in the event of a problem. Sadly, your best efforts won’t save the day every time, but it’s worth a shot.

Listen, there are many reasons why a customer may want to cancel a product. Maybe you were busy on the day of the delivery and didn’t fully explain the product’s conditions. It could be the sales process took too long before you met the customer and she tuned you out. Whatever the case is, it’s incumbent on you to revisit the benefits of the products and re-establish the customer’s buying motive. The best way to do this is by putting yourself in the customer’s shoes and making certain you’re able to deliver a knowledgeable counterpoint to their objection.

Good luck and keep closing!

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