21 May 3 Ways to NOT Lose GAP Sales to the Local Credit Union
Credit unions are the thorn in the side of every F&I department. They usually have better interest rates (on used autos anyway). They can supply the buyer with a draft for a max amount that results in the dreaded ‘cash deal’ for F&I. And….they can provide aftermarket products to members/buyers like VSC, GAP, and Credit Life.
People love their credit union and it’s not to say they are ‘bad’ because they’re not but it does pose a unique issue for F&I managers. If they have to compete with the local credit unions for products like this, how can they increase their chance of being able to sell it at the dealership?
Take GAP as an example. GAP insurance is one of the higher margin F&I products sold and arguably one of the hardest to close. Most buyers don’t think they will ever need it and always seem to have the misconception that it’s automatically included in their car insurance (which it’s not).
How do you keep that GAP sales to the buyer who comes in saying they have pre approval through their credit union? Let’s see…
- Be the Expert – Credit union staff are not (nor should they be) experts in automotive aftermarket products and services. F&I managers are trained to understand these offerings at a deeper level and have the real world stories to back it up. Leverage the training your administrator offers in selling GAP insurance and show the buyer that you are the expert. It’s more complicated than simply showing someone a brochure and a cheap price…educate and ask all the right questions.
- Know What Credit Unions Sell – Your local credit union likely has the name of the GAP provider on their website. Be ready to compare your plan and administration experience to what the credit may offer. Explain the distinct advantages and why buying from the dealer is better for them. If your plan has better coverage (like ours would), be ready to show them.
- Price Competitively – GAP should have a healthy margin but if you know you are running up against a credit union selling the same, be ready with a discounted price for just this scenario. They are paying upfront anyway if they buy from the dealership so why not give them a cheaper price to help make sure YOUR store gets the sale?
Credit unions don’t have to be the enemy when it comes to competing for the aftermarket dollar. After all, they can approve buyers deeper sometimes and they do tend to be generous enough in their drafts to accommodate F&I products. Be creative and be ready to compete for that business to keep penetration up and make it easy on your buyer.
Click here to find out more about how TruGap (powered by TruWarranty) can help you sell more GAP policies and be ready to steal back some of those sales from the local credit union