Upselling a warranty on a new or used car is a great way to increase profits and help protect your customer’s investment over the years. However, knowing how to properly offer a warranty product to a customer can make all the difference in your sales. Many new and used car salespeople make common mistakes when it comes to providing a warranty to a customer, but here is how you can avoid these pitfalls and keep your numbers high.
Don’t Keep Up with New Information
There are a number of warranty products on the market, and each one offers a different option, upsell, price, feature, and more. It’s important that you become familiar with warranty features initially, but it’s also important that you continue to educate yourself – and your staff, if applicable – to stay current on what’s happening with warranties. You may make the mistake of misquoting a feature or coverage benefit, price, or even warranty length if you haven’t confirmed this information in a while. More than anything, it just looks terrible on you and your business when you are selling incorrect information to your customers. Avoid making this mistake by staying current and make it a priority a few times a month to make sure you know what is going on.
Don’t Offer Customers Too Many Options
One of the easiest ways to lose a warranty upsell is to confuse your customer with too many options. While it might seem like the best approach to offer as many options as possible in the hopes that the customer will buy something from you. The best method is to offer select warranty packages that are suited to the customer’s needs. The only way to do this effectively is the be familiar with the warranty options, and to suggest warranties based on the kind of vehicle they buy from you, the amount of driving they plan to do, and what the intended use of the vehicle may be. In doing this, you are providing a tailored service to your customer, and avoiding the common mistake of overwhelming them with too many options. Too many choices typically equal one thing: the avoidance of making a decision. So, make it easy for them to make a decision.
Don’t Follow Compliance Rules
Whether you sell new or used cars, compliance is an essential part of any warranty sale. If a dealership is in violation of compliance rules related to warranties, it can cost the dealer, as well as the customer, hundreds or thousands of dollars in fines and surcharges due to a lack of knowledge. The most straightforward ways to avoid this common mistake is to remain apprised to the updated information related to compliance, don’t oversell warranties pertaining to certain aspects of vehicle maintenance, and don’t apply elements of the warranty to features that are not included. Sounds simple, but this is a mistake many warranty sellers make.
Selling warranties can be a great way to increase revenue while offering a valuable service to your customer. Don’t underestimate the chances to make mistakes when it comes to warranty sales, and always do your homework before bringing a customer into a contract to avoid common errors that dealers make. That way, you’ll always be acting in the best interest of your dealership and your customer, and that’s just good business.