4 Tips to Sell Service Contracts After Delivery

service contracts

“I don’t want an extended warranty. I don’t need it on a new car…it already comes with a warranty.”

Many F&I managers will say that their #1 biggest frustration is getting a customer to buy the extended warranty, especially on a new car purchase. Today’s customers are well informed about these products and most have already decided they won’t buy it before they ever walk into the F&I office. The opportunity to sell the warranty is quickly lost … or is it?

Is there a solid strategy to capture lost service contract sales even after the car has been delivered? How does your dealership follow up to get those selling opportunities?

Let’s take a look at 4 creative strategies to follow up and sell more service contracts after delivery….

   Make an appointment (if this has not already been done during the initial sales process) for you to meet the customer for a service department tour within a week of delivery. Have a process in place to introduce the customer to a service advisor, who can mention current hourly labor charges and then lead into the extended warranty discussion as a consultative sale. The service advisor could even show a common part from the same model and state the fact that most parts are replaced now, not repaired.

Your job here is to simply help inform the customer on current service costs rather than do the ‘hard sell’ they expected in your office a week ago. It’s less intimidating to have that conversation in the service lobby over a cup of coffee than behind your desk.

2)    If you have not been able to convince the customer to purchase the service contract at the time of delivery, have a printed coupon/offer voucher to put in the envelope with their documents. Make sure the offer gives a strong percentage discount or flat rate savings if they buy a warranty from you and make the deadline within one week. Also, offer a payment option if your dealership allows…everyone loves flexible payment terms.

3)    Have your dealership invest in a direct mail/email campaign that also offers a discount to come back to the F&I department for a big savings on a service contract as a ‘Thank You’ for their purchase. Again, this is less pressure than the customer buying on the spot, and if the campaign offers an ROI calculator with real visual impact, you may get a few phone calls!

4)    Play the long game and keep a spreadsheet of the customers that did not buy an extended service contract and put them on a follow-up call schedule with the F&I manager calls starting with 90 days, 6 months, and finally, 1 year after the sale. That call simply reminds them how much of their bumper-to-bumper factory warranty remains, and that they are still ‘qualified’ to add extended warranty coverage. No hard sell here, either…rather a friendly reminder and a courtesy. You will be surprised how effective these calls can be if done right.

Don’t let them get away so easily…

Obviously, the F&I manager’s goal is always to close the sale of all products immediately at delivery, but it’s a mistake to think your dealership cannot resurrect some of those selling opportunities in the weeks or months after the sale.

It will take a combination of determination, consultative selling, and a dash of creativity but the payoff is higher revenues for the F&I department and happy customers who buy a service contract because they want to, not because they were pressured into it at delivery.