New car dealer clients are always looking for vehicle service contracts (VSC) for their Buy Here Pay Here (BHPH) dealerships. This can be difficult, though, because the dealership may believe that adding a VSC program will significantly raise prices and make collections harder. Here are a few good tips to help you find the right VSC program for your BHPH dealership.
Understand the Program
The first thing you should do as a dealer client is research what service contract is so you can educate your BHPH dealers. Sometimes called an extended vehicle protection plan, an SVC is a promise your dealers make to customers to perform or pay for specific repairs or services. The contract costs extra and can be purchased at any time.
The second most important thing to do is to get to know every company you are considering for your dealership. Find out if the company is registered in the state they do business in; if they have met all state requirements; and if they are associated with and support the state’s independent dealer association.
Repossessing a Vehicle
You should also know that the repossession of a vehicle is a normal occurrence. You may have to make a few phone calls, but you need to find out if the repo company will let your buy here, pay here dealership transfer the extended vehicles protection plan to a new owner if a car is repossessed or if they charge for a new contract.
Forget about Markups
Regarding new-car sales, banks are always willing to finance best-extended vehicle protection plans. They also mark up the service contract so your BHPH dealership can make a profit from sales. Just remember your dealers you will have to sacrifice a little of the markup to protect your dealer’s investment.
Questions to Ask
Here is a list of a few questions you should ask a vehicle contract service provider: What would you consider as too high for claims-to-premiums? When does the VSC go into effect in terms of delivery date? Will customers receive a deductible for repairs? Does roadside assistance come with the vehicle service contract? Will the provider of the contract pay claims for repairs done at the service department at the BHPH dealership?
Put Customers First
When you find the best vehicle protection plan for your BHPH dealership, talk about how to incorporate the contract costs without overcharging consumers. This will give consumers an idea of how they will benefit from purchasing extended vehicle protection services. When a car is in need of repair, make sure your dealers help schedule appointments and refer shops you recommend to them personally. This is important because both of you hold a financial interest in the cars the BHPH dealer sells, which helps create lasting relationships with consumers and increases profits for the companies involved.
If you want more tips about finding the right SVC service for your BHPH dealership, contact Freedom Warranty LLC online today.