Don’t Lose VSC Sales to Online Sellers. Here’s How to Be Ready.

Since the pandemic hit in early 2020, dealers have been adding more to their digital retailing experience and selling more units online than ever before (or…ordering more than usual). After all, pretty much everything we purchase can be done online now more than ever…groceries, restaurant meals, and yes…cars. 

With that increase in online-only options, a new and growing set of players in the VSC space are multiplying like rabbits in the industry. More and more are getting their VC infusion and creating their slick websites to compete with dealerships who sell VSC’s. 

How do you as the dealership expert compete with the new online retailers? Can you compete?

Yes…and it’s easier than you may think. 

Why More Online VSC Retailers Are Here

For decades, car buyers have dreaded sitting in the F&I office and getting the hard pitch on VSC’s and enduring the old fashioned scare tactics to scare people into buying them. Add to that the sometimes enormous overcharging that many in the industry got away with in the past and no wonder people would rather get a root canal with no anesthesia than sit in F&I.

Car buyers may want to buy a VSC and know their value but don’t want to have to be in-person to buy one. Like the Carvana’s of the industry, these newcomers saw an opportunity to be that provider without a brick-and-mortar presence and without having to tie themselves to any one dealership to do business. Straight-to-consumer is not a new concept, it’s just that there’s more of them now.

How to Stay Ahead

A consultative approach at the dealership is where your F&I department shines. Being able to talk with someone who is an expert in those products and understands why they are important. Having staff that are well-trained and able to handle any question with ease is always going to be better than ‘ordering’ a warranty online or talking to a chatbot to buy it.

But what do you do if you have customers in your office that say “That’s ok…I have found a service contract online’? Chances are you’ve already heard that once or twice.

Gently and professionally let them know that you are an expert in the value and terms of VSC’s and have had years of experience helping car buyers protect themselves in case of a mechanical breakdown. You are not late to the party and neither are your F&I providers. Many have been around for decades versus the fly-by-night online companies. They won’t disappear after their VC money dries up.

Ask the Right Questions

Ask your customer if they have done their research on the online VSC provider they have in mind. Let me know that many of these newer companies tend to leave the industry after a few years and that’s what sets your dealership apart…you only work with companies that are A-rated and insured and that have been in business for years. 

Be sure to ask if they fully understand the coverage levels offered. You’ll find that once you start asking these questions, customers may realize they aren’t as sure as there were when they walked in.

Keep in mind that since online VSC sellers may have chatbots that move them to a telesales team to finish up the sale, it’s still a bit impersonal to the average customer. There is little to replace the advantage of sitting down with someone who’s knowledgeable and running through the many questions you may have about VSC’s and their value & terms. You have the advantage of the personal touch.

….and you can factor your VSC into their payments so they don’t have to come out-of pocket to buy it. Big advantage to highlight.

Make It Easy to Choose Your VSC

Always position your F&I department and your product offerings in the most favorable light from the beginning. Make sure your staff has a strong presence on your dealership website. Offer tutorials or explainer videos to describe the main menu items that are available to them. Today’s car buyer wants to be educated on their choices, not sold. 

Keep everything about the customer experience in F&I in mind to help make it easier and more efficient. If a customer is feeling good about being at your store to buy their car and they are treated well by F&I, it will be easier to close them on your products rather than having them leave to buy it on their phone the next day.

Also keep in mind that most of these new retailers are big on giving a bargain basement price and will say they can always beat the dealer. Knowing that tactic, have an answer for that if faced with a customer saying they will go online. Consider a better price if there’s room for it and you have other products in the deal. 

A stress-free, easy, enjoyable (but informative) experience should keep the online VSC retailers from stealing your thunder. Part of being prepared to compete is having a solid provider in your corner to help with best-in-class training, private labeling, marketing, and a claims experience that’s second to none. Give us a shout at truWarranty today to see how we can help you stay ahead now and into the future.

date published
March 21, 2022

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