Tire & Wheel - Separate or Bundled Offering?
Of all the menu items that F&I has to sell, tire & wheel protection doesn't always get the love it needs. Yes, the margins are decent, but the big hitters like VSC and GAP tend to get more attention when it comes to the push to customers at the time of purchase. It begs the question...should tire & wheel be moved off the main menu and perhaps to an ancillary bundle or is it worth it to still sell it as a stand-alone product?
Tire & Wheel on its own?
Advantage here is that the margins stay intact and the F7I staff can continue to build value with the plan and price it accordingly. It works well as an add-on to VSC and other cosmetic protections like windshield and PDR.
If the plan is part of a larger marketing push that is dealer-branded, even better. It helps overcome the objection of ‘I think I have this with my local tire shop’ or ‘My car insurance probably covers it’. Keeping it as a stand-alone makes it a bit easier to train new F&I to sell it efficiency, too. It’s the kind of product every customer should consider anyway given the rising costs of tires.
Tire & Wheel in a bundle?
At its core, this protection is more cosmetic rather than structural and could bolster the value of a well-constructed and reasonably priced bundle. If added with windshield, PDR, interior/exterior, and 24/7, it could replace the singular alloy coverage most bundle have. Covering the wheel is only a part of it...the tires cost a lot, too.
You have to do an analysis of how much profit you may lose by shifting this coverage to a bundle. If it’s nominal at best while factoring in penetration levels, it may make little difference and could actually increase the acceptance of the bundle as a Line 1 add. Give customers the most for their money, even within a bundle of ancillaries, and you have a good chance of a high acceptance rate. Even now with prices on new units skyrocketing, it’s a great product to offer on every car you sell. Something to consider…
If your store is ready to consider a change to how you offer Tire & Wheel, click here to reach out to learn more about TruTire powered by TruWarranty. We’ll be happy to go over your options whether it’s to add to your existing menu or wrap it up in a bundle. We’re here to help you build the best menu offerings for your customers at a time where a little creativity is needed now more than ever.
As more states set mandates of selling only new EV’s within certain timeframes and manufacturers announce their own plans to make most if not all of their lines EV within the next 5-10 years, the effect it will have on the products F&I sales cannot be ignored.