Selling protection products couples opportunity with responsibility

"We are in business to make money. So is every other business. But we are also in business to provide a service for our clients and the more we do that, the more they can and will do for us.

The F&I office allows dealerships to tie up contractual loose ends, make certain clients understand the details of manufacturers’ warranties, and provide the valuable service of one-stop shopping, encouraging the act of in-store financing and saving the client valuable time.

But the F&I office does more than just that. The vehicle is the primary purchase but the visit to the F&I office also provides customers with the opportunity to purchase self-protection products, which help them maintain their lifestyles while assuring long-term personal comfort.

As marketers of these products, do we have any responsibilities? Do we care which ones are sold, how they are presented and what consequences, if any, may be experienced by consumers for not purchasing them?

The obvious response should be "yes" but is this really happening in F&I offices across the nation?

Relative importance
If one were to rate the products and services marketed in order of importance, where would each one sit? Let’s take a close look.

There are various types of Creditor Insurance:

A&H coverage is an obvious 10 on our 0-10 rating scale and so is Life. Why? These products protect against the ruination of one’s life or that of the loved ones left behind.

Critical Illness Insurance is another 10. One never knows when the ultimate bad news will be delivered to any of us.

Mechanical Breakdown coverage is also 10. Vehicles break. They cost lots to fix. This one is a no-brainer.

Job Loss coverage is a 9; it has to be in this unstable market.

Gap Insurance is a good one, too. This product will pay the difference between what one owes a lender and what an insurance company thinks the write-off is worth. Let’s give it a 7.

Then there’s Walk-Away Insurance. Also a good one in the event one’s lease must be terminated prior to its true end date. Another 7.

We also have the beauty enhancement products for vehicles; Protection Packages as they are so often called. Let’s give them a 5. Why? Although we all love to sell them and the money they make, the reality is we can live without them. This is not to suggest we don’t sell them; not at all. I am simply discussing the level of priority in which each may fall.

Prioritizing products
Here is the point of all of this. Due to financial restrictions, most consumers cannot afford all we have to offer. Therefore many F&I managers will sell the items containing the highest gross, leaving the others out. At first glance this seems logical and fiscally responsible. Buti s it, in fact, costing us money?

If one has the opportunity to sell Creditor Insurance, shouldn’t it take priority over the others? If we agree with the list of priorities mentioned earlier wouldn’t it make sense to assure client protection against catastrophes that may damage lives for years?

If one’s credit is ruined due to slow or stopped payments it makes sense to believe the auto world will have lost a customer, at least temporarily? Sub-prime financing may not always be available so protecting what we have (the client) would be good step to take.

If a vehicle’s seats get stained, ugly as it may be, the consumer can still drive it. Unemployed and unable to make payments, the shiny car with the clean seats will be repossessed regardless.

Once again these comments are not to suggest we stop selling ‘ProPaks’. If the payments are comfortable and the wherewithal is there, sell everything, every time to everyone. If however there is a financial ceiling, then client protection should come first. At the very least it should be promoted first, allowing the client to make his or her final purchase decision.

It’s in our interest too
There is a financial benefit to F&I offices for all of this as well. If one places a priority on the sale of Credit Insurance, then chances are sales in those areas will increase. Some F&I managers may believe their pay cheques will shrink as a result, since grosses can be higher from chemical sales, with little to no chance of chargebacks. Perhaps.

But if we protect our clients from the murky waters that lay ahead of them, isn’t there a chance they will be helped... and will be able to return to buy again? Wouldn’t that, paired with your dealership’s after-sale service pretty much assure a return customer?

OK, if all that isn’t enough there is one more money-based point to make. Once your clients have left the store with their vehicle, you can’t go back and sell Credit Insurance, can you? If you had sold it to them up front, you could always go back and sell Service Agreements, ProPaks, whatever. Once the turnstiles stop spinning, however, they cannot insure their loan from all the possible bad things that could happen.

A win-win suggestion
So here’s my suggestion: sell the Creditor Insurance as the priority it is. Get them to protect themselves against all the things that are really, truly important. Then concentrate on the future performance of the vehicle by protecting it from any breakdowns. If there’s any money left, keep going; if not, put the other products on the backburner for another day.

All you will have to do is remember to call them in a short while later, arrange a way for them to buy the products, have them come in and get them applied, provide them with a car for a few hours to do so and everyone will be happy.

Talk about having your cake, eating it too... and looking after your cherished customers all at one time. Harvey Cohen is the author of four books and principal of

Harvey Cohen Learning Systems, Inc., a Canadian company dedicated to automotive F&I and sales training and support. He can be seen as the sales and business coach on the TV show, Style by Jury. You can email Harvey at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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