First-time buyers are sometimes a tough sell in F&I. Banks and OE captives usually have a mountain of requirements or steps needed to get approval and even at that, LTVs 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. Add to that the record high values for used cars and you have lenders that are even more hesitant than ever to open up more financing room.

If you haven’t created a first-time buyer bundle, maybe it’s time.


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 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 on time.

But never make it seem like they HAVE to buy it to get approval. That’s where so many dealers have made that mistake and paid a steep price for wading into unethical waters with customers.

GAP Insurance

Add GAP for a ‘financial protection’ bundle to round out both mechanical peace of mind and knowing that the balance of the car will get paid in the event of a total loss or theft. The finance company will love seeing that included, too, for obvious reasons.

Ultimately, 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 also 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.

Related: Four ways to maximize customers’ tire satisfaction

Don’t Forget Your New Lease Customers

A first-time lease customer should have a bundle just for them. When you think about all the turn-in costs associated with leasing and how so many first-time lessors never think about that when deciding to get that great deal, a bundle makes sense.

Offer a lease bundle that includes ancillaries such as windshield, alloy protection, PDR, and key replacement. This helps them be sure that when they bring the car back, they won’t get hit with high reconditioning fees that could set them back hundreds of dollars. Explaining it as the best way to help them be sure the car looks great at turn-in should be an easy sell.

And if they don’t believe that appearance issues at turn-in are a big deal, have the service department copy some RO’s for you to show them how much fixing scraped alloys costs or how much that dime-sized chunk of glass in the windshield will cost to fix. A first-time lessor will be shocked when they see the numbers, and that’s what you want.

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