Bundles Just for the Newbies
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, now may be the best time to start…
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.
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.
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 more expensive ride.
First Time Lease Customers Benefit, too
Offer a lease bundle which 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.
F&I is undergoing a bit of a transformation in ‘22. With a challenging selling environment and two years out from the pandemic, the old way of doing a deal has had to shift to something more creative and more reflective of the way buyers want to buy a car. For F&I, that means stepping outside of the decades-long comfort zone of high pressure sales tactics, payment stuffing, and bloated menus.