Give First-Time Buyers a Bundle of Products Just for Them

First-time buyers are sometimes a tough sell in F&I. Banks and OE captives usually have a mountain of requirements or stips needed to get approval and even at that, LTV’s are watched carefully so they don’t buy more car than they can afford. While it can mean higher buy rates for F&I (always a good thing), it can be a headache for approvals.

When offering products in F&I to first-time buyers, the conventional wisdom is to offer everything but the kitchen sink assuming it works within the payment and the bank gives room for it. Some are notoriously stingy when it comes to what they will allow.If you haven’t created a first-time buyer bundle, maybe its time has come.

VSC’s should, of course, be offered to every first-time buyer for obvious reasons. They may be tight on funds if they are younger and have already struggled to come up with the down payment. They could be a ‘ghost’ and have no credit...and thus no credit card to use if there is an expensive mechanical breakdown.

First-time buyers are prime for VSC’s for another very good reason...some banks and finance companies will actually look favorably on this product as they will see it as a sort of financial insurance against a costly mechanical failure. They don’t want a broken AC compressor to keep them from getting their monthly payment. Of course, a VSC is never a requirement for financing (super illegal and unethical from days gone by) but if it’s reasonably priced and doesn’t break the bank, it’s a good thing for both buyer and banker.

First-time buyers could have a bundle with VSC, PPM, and an appearance ancillary (interior/exterior, etc). This helps increase the odds that this buyer will make sure the car is sound mechanical and cosmetic shape to help with a future trade-in when they will no longer be a first-timer and they can step up to a better and more expensive ride.

Click here to see how truWarranty can help your dealership put together a package (ideally private labeled to your dealership brand) that appeals to the first-time buyers in your market. They may be a little harder to get approved but that should never be a barrier to being able to take full advantage of protections that all other buyers get.