Leveraging a Limited Warranty to Increase VSC Penetration

Leveraging a Limited Warranty to Increase VSC Penetration

There seems to be a lot of debate in some dealership circles about preloading ancillary products and taking that off the plate of F&I. Some hate it because they feel that customers will push back immediately if they see it on the addendum sticker as added to the price. Still others think F&I managers will be mad that they lose another product to sell.

Both sides have a point, we suppose. But there is one product that, when preloaded, can actually make upsells much easier for F&I…and that will make them much happier.

One Warranty Can Help Sell Another

What if we told you that by offering a preloaded Limited Warranty (think 12 months for powertrain), your F&I could actually upsell that same customer to a longer term VSC? It’s not as hard as you may think.

Buyers are looking for as much protection as they can get from unexpected mechanical failures. No one wants to be days into a summer vacation to the Grand Canyon when the AC compressor decides to die and the kids start melting.

For your used cars, many have no factory protection left, and by offering a standard 12 month/12,000 mile Limited Warranty branded as your ‘Exclusive ABC Auto Group Protection’, you give your buyers some peace of mind against large repairs.

F&I can take this basic protection as an immediate upsell opportunity and get a chance to grab a slice of the profit pie by explaining that a longer protection doesn’t cancel their dealer-provided warranty…rather it helps extend it for as long as they are financing their vehicle. Longer plans can also cover a wider amount of components, etc.

Help F&I See the Light

With proper training, the F&I managers will see that their opportunities to sell bigger VSC’s is not hampered by a Limited Warranty. Having it included is easier to sell now to lenders and F&I can immediately pivot to a longer plan. They are already well trained in that kind of presentation and this should be an easy segue into convincing a buyer that the extra protection is best.

Want to be extra creative? Consider a small bonus for every VSC upsell from the Limited Warranty. It doesn’t have to be much but if F&I was strong enough to get it, sweeten the pot a little. Never hurts.

Click here to check out our easy-to-add Limited Warranty product. Good for your customers, great for F&I.