Are you confident that your team knows the best way to get the most extended warranty sales?
Extended warranty sales are a great way to boost profits, but customers aren’t always willing to purchase extras. Just because some clients are uneasy, doesn’t mean you should write them off completely. They can be a great asset to your dealership.
There are many companies and options out there when it comes to extended service plans (ESPs). You have reps continually calling, but how do you know which one is right for your dealership? More importantly, how do you know which one will help your extended warranty sales?
First, study all the current plans that are available, and don’t forget to research costs for the dealer and the customer. Too many options are overwhelming and make it harder to sell, so minimize the number of ESPs you offer. You should provide one from each of the following categories:
- Vehicle Service Contracts
- Guaranteed Asset Protection (GAP)
- Tire and Wheel
- Certified Warranty Protection
- Paint, Windshield, and Interior Protection
It’s important to know your client base, and with the use of CRM reporting, you’ll be able to analyze your demographic, which is especially helpful for selling ESPs. You’d never sell a Lexus to someone in the market for a Hyundai, so the same idea applies to protection plans. If a customer cancels their contract early, you won’t make the full profits you planned on getting. Be smart with your pitch and try to find the right fit for the customer.
Just like you stay informed about the vehicles you sell, you should know your ESP options. Get to know these plans inside and out. It’s a lot easier to sell when you can confidently answer your client’s questions.
Now that you have the right products and information on hand, it’s time to improve your extended warranty sales.
Making your extended warranty sales part of the process
Do you have a process for selling protection plans, or are your customers just being presented with them at the last minute? Timing is essential when it comes to offering extended coverage to your customers. They should be fully aware of all their options from the get-go.
Is the client looking for a used car? Did they come into the shop with a doozy of a repair? Now is your chance to not only sell a vehicle but to sell an ESP. Chances are if they’re looking at purchasing it’s because the service costs were too high. Now you have the perfect comparison for your client to show how much cheaper it would have been if they bought the warranty for their previous vehicle.
If your client is buying new, they’ll want to protect their investment. Paint, windshield, and interior plans are perfect sells for new car clients. Some dealers even find success in having examples of how these products work. Some companies offer little samples, and they are great to have in the business office, in service or parts and even in the waiting rooms. When customers can see the difference these products can make, they are a lot more likely to purchase them.
Tire and wheel plans are marketable to new and used clients. Combined with prices that rise and fall with the oil market, this ESP is perfect for frugal customers. You can quickly show the client their value by making a chart of the average cost of tires versus the contract cost. Usually, the contract wins.
GAP plans are a harder sell, but worthwhile to some clients. Your pitch relies on the unexpected, which means it’s your job to convince them of why they NEED this protection. The cost of the plan, broken up over the duration of the loan will usually make this more appealing.
To increase extended warranty sales, you need the right products and lots of information. Never be too pushy, but always incorporate talk about ESPs from the beginning. There are many chances to sell extras, so don’t let money slip through your fingers.