In 2019, Show Budgeting Solutions to Sell More Retention Product


The median household income in the U.S. is $57,617, according to 2016 U.S. Department of Commerce data. The median references the income level that falls in the middle of all states’ (and Puerto Rico) low and high-income ranges. 

IRS Statistics of Income, according to Motley Fool, note the average household income was $67,565 in 2015. “Average” and “median” are different range calculations. They explain the difference between the two figures but are similar enough to make my point.

By filing status, IRS household (average) incomes are:

  • Married filing jointly – $117,795 
  • Married filing separately – $64,819 
  • Head of household – $35,876 
  • Widow/Widower- $57,577 
  • Single – $34,940

Why is noting these figures significant? Because where a buyer falls in this demographic tells you how to best approach them when presenting your F&I products, especially prepaid maintenance and service contracts, both cost-avoidance solutions.

Evolving consumer expectations and lifestyles call for significant change in how F&I products are presented to customers. More than ever, those presentations must focus on the WIIFM factor.

WIIFM, shorthand for “What’s in it for me?” is the unasked question on every buyer’s mind when considering a purchase of most anything. The most successful in the F&I office know to present through the customers’ eyes (and heart) to hit their WIIFM buttons.

Dealerships will sell about 75 percent of the prepaid maintenance programs they put into effect in the service drive. The balance is enrolled through F&I. In either case, be sure the prepaid maintenance presentation makes clear how the plans save the buyer money and help protect their budget, which helps them grasp critical WIIFM points.

When WIIFM is not grasped, and offerings promising those solutions aren’t taken advantage of, the customer misses the benefit of a bona fide protection product. The dealership risks losing that customer to another dealer or the aftermarket for his or her vehicle service needs.

A dealer serving a large and affluent metro area is likely to cite those higher income levels as a reason not to help consumers understand the value in these plans’ long-term budget-protection benefits. This may be an omission on these dealers’ part, as individual consumers within a high-income market may not have the deep pockets or available cash to meet vehicle emergencies that prepaid maintenance and service contracts can help offset.

So let me go at this point again. Given most consumers’ economic wherewithal today, their WIIFM is often not what they’re asking for, but fearing. You must address that fear. The right answer helps them see why and how products like PPMs, service contracts and other F&I insurance products can help them protect their vehicle investment and household budget.

The fact is, too many Americans have little to no spare change for handling unexpected repairs. AAA has noted that one in three American drivers could not pay for an unexpected vehicle repair of $500, without going into debt. confirms this as its own studies show that only half of the U.S. population maintains an emergency fund and that 63 percent of Americans say they cannot handle a $500 car repair.

Because of this, AAA reported, over 30 percent of U.S. drivers skip or delay recommended vehicle services or repairs.

When these realities are crafted into a dealer-branded PPM presentation, the dealership connects concrete customer benefits to the prepaid maintenance sale – PPMs are an affordable investment to protect against risk.

“Most products in F&I are designed for people who don’t keep a lot of reserve cash around, and programs like prepaid maintenance and service agreements, especially when rolled up into the financing, are ideal solutions for people who are poor at budgeting,” noted Garen McMillian, CEO of F&I reinsurance company SideCars, Inc.

Your customers want facts to back up what you tell them, so consider what The Car Care Council has noted about vehicle maintenance, and – I add here –how these facts help point toward why customers who use products like PPMs can offset vehicle maintenance and repair expenses:

  • 72 percent of vehicles inspected at over 400 check lanes in the U.S. needed immediate repair or maintenance. 
  • Each year, $50 billion in vehicle maintenance and repairs go unperformed. 
  • Consumers do not know what to do to keep their vehicles safe and performing correctly – that’s a solution you can provide them.

A survey by DMEautomotive, part of Autopoint and Solera Holdings since 2015, noted three of five customers who receive prepaid or complimentary maintenance plans from dealerships “are likely to continue servicing their cars at the dealership after their plans expire.”