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Upselling can exponentially increase profitability, but with so many used car dealer warranty options available, how can you know if you’re doing it the right way?
While used car dealer warranty sales can be beneficial, most dealers don’t spend enough time ensuring their success. There’s more to upselling than keeping a drawer stuffed full of forms. It’s important to take the time to audit your process because there is almost always room for improvement.
Three of the worst used car dealer warranty mistakes and what you can do to avoid them
1. Failing to keep up with changes
Warranty selections are always changing. New companies pop up all the time, and existing businesses are changing their options frequently. It also seems as if representatives are perpetually calling or stopping by your office for a chat, and it’s not always at the most convenient times. As busy as your day to day can be, it’s important to take the time to talk with them.
Research is your best tool for successfully selling add-ons. Make the time to understand the services offered, their potential profitability, and their limitations. This information will help you confidently present packages to customers. When you are confident in what you’re selling it’s a lot easier to convince your client that it’s a necessary purchase.
It’s also smart to learn about your chosen companies’ claim process. You don’t want work with a company that makes claim submission a miserable process for your client. You’re the one that sold the warranty, so chances are your client is associating that experience, good or bad, with your dealership.
Also, keep in mind that this is not a one and done job. Make sure to review your offerings periodically for changes in packages and also to make sure costs are reasonable, for both you and the client. Used car dealer warranty research is the perfect task for your downtime, and won’t take much out of your day if you stay on top of it.
2. Making it hard for your customers to choose
You’ve done your research, and now you have to decide what to sell. While customers like options, having too many choices is not only overwhelming, it’s not a good idea for your dealership either. Your best bet is to come up with a menu of services, similar to what your service department may already have. Customers will love how prepared you are, and everyone on your sales team will find it beneficial to their process as well.
Make sure to list all of the companies you work with and which products of theirs you offer. Always include the type of warranty and the client cost, but make sure you update any changes to avoid confusion down the road. Warranty terms, mileage limitations, vehicle age limits, and additional add-ons such as GAP or paint protection are also smart to include. Just make sure your list is easy to read, and not too cluttered.
3. Don’t be careless about compliance.
Every compliance mistake, big or small, affects your dealership in a significant way. Even one little mistake can cost thousands of dollars in fines, and with all the moving parts in a dealership, it’s easy to get distracted, putting you at risk to lose money.
When it comes to used car dealer warranty compliance, there are a few things to consider:
Keeping track of each company’s requirements is essential. Make sure you have all the current forms and contact numbers. When new forms come in get rid of the old ones to avoid confusion.
Monitor which types of contracts sell, which don’t, and which are most profitable. You don’t want to waste time selling something no one is buying, especially if you aren’t profiting.
Make sure you are filling the forms out correctly. This may seem silly, but it’s common to haphazardly fill out forms when you’re in a mad rush, and it drives warranty businesses crazy (as well as insurance companies and banks).
Stay up to date on state and federal used car dealer warranty regulations. The FTC is a useful resource as well as NADA.
By following this advice, you are setting yourself up to sell more used car dealer warranty contracts and add-ons. Staying organized and informed will save time and money, and who doesn’t want to make more money?