The Advantages of a First-Time Buyer Bundle in F&I

Bundles as an F&I solution for your dealership can be lucrative and a boost for your penetration percentages. They are easy to create and with the right F&I provider (like truWarranty), you can offer an all-in-one package that offers the right product mix for the right buyer.

But is a bundle right for the first time buyer and if so, what should that package look like?

First time buyers have a lot stacked against them. Lenders see them as a risk and are hesitant to give approvals without stips such as POI. They may have no car credit or they could be a ‘ghost’ and have no credit at all. Either way, the risk is real.

Bundles can be created for any buying scenario (leases, off-road, etc) but a bundles for a first time buyer would be unique in that it could be a product mix to not only help them not shoulder unexpected costs down the road but it could be attractive to the lender as well.

A first time buyer bundle should have the following products:

  • VSC: Reduces the risk of mechanical breakdown impacting the monthly payment for a borrower that is paying on a car for the first time.
  • GAP: If your state allows GAP to be sold, the lender will see this additional as very beneficial to them...their loan will get paid in its entirety. No loose ends and no chasing the borrower for the last few thousand to clear the balance.
  • Appearance Ancillaries: If the first time buyer has the ability to make sure the interior and exterior will be kept looking good, it makes the car an easier sell at auction in case the car has to be recovered.
  • PPM: See above. The lender will want the car well maintained, too. A car that is in good shape will bring more at remarketing than a car that’s trashed. Sounds harsh but it’s true.

Of course it’s unethical to present an approval based on these products being included nor can the F&I staff make it a ‘requirement’ to buy such a bundle. But if your dealership has a high number of first time buyers, offering a white-labeled bundle just for them can only help everyone involved.

And if it’s priced fairly, it should be easy to work it into the loan. Lenders have been more generous in recent years about adding more F&I products and this kind of first time buyer protection package should be a no-brainer.

Click here to learn more about how truWarranty can help your store create a strong package for your newbies to help them with higher peace of mind while they pay for their first financed car. We help you help them.

publisher
category
Bundle
date published
October 18, 2021

Related Articles