car dealership vehicle service contract

How Customers and Dealers Benefit From Extended Service Contracts

How Customers and Dealers Benefit From Extended Service Contracts

It would seem that selling an extended vehicle service contract to a customer would be almost second nature, a natural extension of a vehicle purchase. The pitch almost sells itself: Buy this and protect the asset you just invested in! Unfortunately, many dealers have to be convinced that selling the best extended vehicle service contract on the market is worth their time. Read on to learn why it is.

It’s Easy Money

Your customer just made an investment that is worth tens of thousands of dollars or at least several thousand dollars if they purchased a pre-owned vehicle. Like everything in life, they could drive their vehicle for five years and never have anything other than routine maintenance to perform, or some oddity could occur, and they end up needing service on their way home. That is the nature of owning a vehicle.

The insurance vehicle service contract providers offer is a guarantee against those odd occurrences. In addition to basic coverage, the best extended vehicle service contract offers the customer security beyond the manufacturer's warranty on some repairs and replacements. That alone can be a huge financial benefit to customers that makes purchasing the contract worthwhile.

The More the Merrier

Vehicle customers, for the most part, visit a car dealership because they have a need. That  need is a set of wheels they can depend on. Sales people pitch and sell them on additional features, but for the most part, their basic need is an ability to transport themselves. It makes sense to do everything possible to protect the thing that fills that need. The best vehicle service contract companies know that and put together extended service contracts that cover what can hinder filling that need. When pitched to customers in that light, the reason for purchasing a coverage contract becomes really clear and worth the investment.

That need also opens the door to sell the contract while selling the features of the vehicle. The motor that is covered under the contract is vital to the vehicle and has expensive maintenance needs. The computer board may eventually need replacing because it can malfunction or even break. Every customer complains about the conditions of our roads; the extended service contract may cover tires and wheels. By pitching the practicality of the contract, it sells itself.

What, though, does the dealer get out of it?

dealership vehicle protection service agreement

Satisfied Customers

A customer that knows their vehicle is covered should something go wrong will look at the dealer favorably. They will know the dealer has their best interest at heart. Further, they know if something goes wrong, the fix won't cost them thousands out of pocket. All that builds goodwill, even if the contract is never used.

Additional Revenue

If a dealer’s salespeople only sell an extended service contract to 5% of its customers above what it already sells, that is thousands in extra revenue monthly for the dealer—and, it doesn't cost them a thing. The salespeople do the selling, vehicle service contract companies address the coverage, and the fix is done by mechanics. Even if the customer brings their vehicle to in-house mechanics, they still produce revenue by virtue of fixing the thing that exercised the contract.

Marketing and selling vehicle service contracts to customers is a natural extension to actually selling the vehicle. It is easy profit for the dealer, and the customer can rest assured that if something happens, it will be taken care of. Check out Freedom Warranty LLC for more details.