Time to Move GAP Down in the Menu Order? Maybe

Every F&I manager has a flow when they sit down to do the deal. There’s a cadence, a set order that each manager likes to go in to make sure that maximizes their ability to not only sell the maximum amount of products but also to establish rapport and hit the notes for compliance.

But the order of presentation for the product menu is the tricky thing. After settling in on rate, the high margin products are usually the first to be presented. Going for the highest margins products first is usually strategy with the thought being that the smaller products don’t matter as much.

There’s a better way to approach this order and one that most never consider.

Why Menu Order Matters

Decades ago, the product that was the most profitable was credit life insurance (remember those days?) and that gave way to the late 70’s and 80’s where every deal had a VSC included in it. 

Everyone saw the value in offering that first after the interest rate was settled on. Taking a high payment? Let’s protect your bank account while you’re making payments and cover the car for another 5 years! Customers saw the value right after seeing what their payment was. It made sense.

But the order in which you offer your F&I products matters more than you think. If you are offering the most expensive product first every time regardless of the deal you’ve created, you could be missing chances for small wins by swinging for the fences too early.

Sometimes coming in with the smaller products or a bundle of smaller ancillaries can soften the blow when adding to the deal. But beyond that, there is another consideration when settling your order presentation…


Switching the Order Can Impact Customer Retention

The most important factor in what products to sell is retention…does the product have a high likelihood of helping bring that customer back to the dealership for the service work in the plan? Will they come to your service lane for the alternator replacement or the dent removal? Will your parts department get to help with that replacement key fob?

You want to focus on products that help them come back to you first. That’s where the money is.

Looking at the two most popular products, VSC and GAP, they are often #1 and #2 when offered after the financing is settled. 

There’s a case to be made, now especially, that GAP in particular can be pushed further down the menu. GAP policies have been steadily increasing in cost over the last 3 years and two big factors are driving this. 

  •  Banks are capping the amount of a GAP policy as a percentage of the overall deal (assuming it’s financed) 
  •  The industry knows that insurance companies are more likely than before to simply total a car rather than pay for it to be fixed.

Another reason to reconsider GAP as the second product presented…there is no retention advantage to it. GAP doesn’t bring your customer back to your dealership as the claim is settled between the customer and the insurer. 

Tire & wheel, PDR, key replacement…all of these products may not have the high profit margin you want per deal but your dealership benefits more by offering them earlier in the menu than later. These coverages are statistically more likely to be used than something like GAP.

Great Time for a Product Bundle

Offering a solid product bundle right after presenting the VSC makes sense here. ExoBundle is being leveraged this way as an immediate compliment to the VSC as protections for the smaller things that can be easily fixed at your dealership for added convenience.

Alloy Wheel

Key Replacement

Windshield Repair


Interior/Exterior protection

All easy to offer together for a low backend cost. Preload it to make it an easy sell for customers that see that the little things can add up and cost more than they thought.

This is not to say that GAP has no value. Of course it does and it’s still a moneymaker but it’s simply not as easy to sell as it once was. By leaning into smaller products that bring customers back to your store more frequently, those your Service and Parts departments will thank you.

Give us a shout here to see how much more PVR your dealership can earn by offering a product bundle at a better margin and earlier in the presentation. 

date published
March 3, 2023

Related Articles