Why are VSC sales much lower on cash transactions? Does the perfect car fairy bless the cars of the customers who choose to pay cash? It’s amazing how many F&I managers will conveniently leave for lunch knowing that the next deal is the DREADED cash deal. If we focus on PVR and not the customer, you will eventually fail.
We must put our customer first and give them the same opportunity as every customer every time. Just because the customer is stroking a check does not mean they do not want protected. 
If you’re unable to convert the cash transaction to finance or lease, you must start thinking about how you are going to bring value to the table. Repair scare is old school and customers will shut you down and payment manipulation is not available because you’re not financing. It is important to use the information that the customer provided earlier in your interview into a custom-tailored menu presentation. You must bring the same level of enthusiasm and passion with EVERY client.
This is where F&I managers fall short by not using a menu, not doing the interview (because it is cash), and then not building any value into the product. This is a recipe for a big fat ZERO and a reduction in PVR.
Now here is the good news. You can start right NOW with a brand-new outlook on cash transactions. The cash deal does not get hung up on your CIT log, as you are collecting the funds that day. The cash deal requires less paperwork, resulting in a faster overall transaction. The cash customer has something really cool that a lot of customers don’t have, CASH.
They have cash. You just have to ask for it. All customers want the greatest use and enjoyment out of their new vehicle. They also want the least amount of aggravation at the LOWEST total cost. The service contract is designed for that. It pays off all the repairs plus always gives the customer a car to drive.
When the cash customer says no to the service contract he/she is looking at the cost compared to what they think they are going to have in repairs and they are typically unsure.
It is our job to break down the math and introduce their exit strategy that ONLY comes with the VSC.
- When the customer invests in the service contract they are setting themselves up to be able to negotiate in a position of strength when they trade or sell out right.
- They have the option to keep the car another year, resulting in a massive savings of depreciation, interest and sales tax.
- If we learn to change the conversation on cash transaction into a value proposition for the client, we will sell more.
- If you slow down and articulate exit strategy, then you will sell more service contracts.
Last time I checked. the perfect car fairy does not exist. It is time to explain this to our clients. The happiest customers never have to pay for a repair and never have to be inconvenienced. The answer is simple….It Is The Service Contract.
