(This article was published in the RV Executive Today, October 2021 issue)
For those of us in the industry, the benefits of an extended vehicle service contract (VSC) are obvious. Very few F&I professionals achieve 100 percent VSC penetration on a consistent basis, if ever. This is true for both seasoned RV owners, who are familiar with the ups and downs related to mechanical and system repairs, as well as first-time buyers who just aren’t informed of the true exposures and decline coverage. What’s keeping them from saying yes?
Typical buyer objections include a belief that the RV is high quality and nothing bad will happen, or they know someone who’s a mechanic, or they’ll just take their chances and pay as they go. Ultimately, it boils down to this: consumers who decline coverage may not understand how a VSC protects their investment, helps to eliminate the hassles involved with a covered repair, and protects their monthly budget! Illustrating these benefits may lead to more buyers saying yes.
Demonstrating value can be a challenge for even the most experienced finance managers. Here are a few tips designed to help increase your RV vehicle service contract penetration.
Emphasize Pay Now, Save Later
Some consumers want to wait until the factory warranty has expired. While it’s true that most consumers are eligible to purchase VSCs at that time, the longer they wait, and the older their RV gets, the more expensive that coverage will be and most likely they’ll have fewer coverage and/or term options.
Impress upon your customers that inflation is a very real concern. Bottom line is that parts and labor costs are already significantly higher than a year ago and will likely continue to rise.
Additionally, waiting means the customer will have to pay all at once or finance the contract purchase over a shorter period of time, versus financing the cost over the full term of their loan.
With the majority of people focused on monthly budgets and payments, the perceived cost over the long term is much less than the short term.
Highlight Additional Benefits
Many buyers, especially first-timers, aren’t aware of all the benefits that come with a VSC. They may believe it’s similar to a factory warranty or that it only covers mechanical breakdowns.
Education is key here – give real-life examples of what can happen and paint a visual picture.
What happens if an RVer:
- Runs out of gas or gets a flat tire and are stranded on the side of the road?
- Breaks down while at the campground and you can’t move it?
- Can’t figure out how to dump their tank or they forget how to slide an extension in or out?
Vehicle service contracts come with many additional benefits, such as roadside assistance, mobile mechanics, road hazard tire repair, trip interruption, rental reimbursement, and free technical support provided over the phone. Show your customers a list of additional benefits that may not be covered by the factory warranty and let them know these are all day-one benefits with a VSC, providing peace of mind.
Don’t Just Tell the Value – Show It
One of the biggest obstacles to selling more RV vehicle service contracts is the inability to passionately express why it makes sense. Again, education will help overcome this obstacle.
Take your finance managers over to the service department and show them recent invoices for repairs commonly covered by service contracts. Have the service writer explain the costs, including what broke, why it broke, cost of parts and labor, and how many hours it took to repair. Do this on a regular basis.
Service repair orders make pretty convincing visual evidence. Also ask your F&I product provider if they have visual aids, such as laminated or digital materials, that finance managers can show to customers. When customers can visually see that something like a diesel fuel injector on a motorhome can cost over $3,000, or that a slide-out pump on a towable can cost over $1,500, the price of a service contract looks better and better.
Get Out of the Box
Are your finance managers still doing menu presentations at a desk? In the entire purchase process, being “in the box” is the part that customers dislike most. Try getting out of the box and do the menu presentation in the RV with the customers. We have seen more dealers take this approach and they have had amazing success.
It’s easier if you have mobile technology, but this can still be done the old-fashioned way. This works well because customers who have agreed to purchase and are physically inside the RV feel an instant sense of pride and ownership.
While presenting, walk through the vehicle and visually point out what’s covered: this electrical item is covered, this component is not. The customer may be more likely to say yes to protecting what is theirs.
Offer a Limited Warranty
When evaluating your marketing arsenal, really consider the return on investment for each effort. Question what is driving you toward your end goals, and if alternative methods for marketing and advertising—like geofencing—could be a useful addition or missing link to your marketing strategy. Not to mention, geofencing is pretty darn cool.
When selling pre-owned vehicles, offer a limited warranty with every purchase. This is a fantastic sales differentiator and allows your finance team to have a natural transition from the limited warranty benefit to upgrading and wrapping that with a comprehensive vehicle service contract, as well as other products and coverages.
Let’s say that you have decided to offer a three-month, 3,000-mile warranty. What happens on month four or mile 3,001? Your customer has big plans for their RV – ask them where they plan to go over the first year. Then use that as a jumping off point for a discussion on protecting those plans and their investment. And remember to cover the extra benefits an RV VSC can provide, like rental and trip interruption.
If you still run into objections, don’t take no as the final answer. Follow up with customers via email and phone several times before their factory warranty expires. Once they’ve spent some time on the road, they may be more likely to appreciate the protection that an RV VSC can provide.
Walt Burns V, RV Brand Manager for EasyCare, an APCO Holdings brand, has over 30 years of experience in the F&I industry. Walt’s primary focus is consulting with RV dealers throughout the country to assist them in driving performance for their businesses and enhancing CSI.
Related Articles
Learning how to execute the close, even in the face of objections, means more F&I profits for your dealership and ensures a worry-free RV experience for your customers.
For those of us in the industry, the benefits of an extended vehicle service contract (VSC) are obvious.
Learn how to reach your buyers that didn’t purchase a vehicle service contract with these four tips from EasyCare’s Walt Burns, featured in RVBusiness.
RV sales are booming—but that doesn’t just apply to the RVs themselves. Learn what the top-selling RV F&I product is this year and what makes it so appealing to buyers.
Set your business apart with corporate social responsibility and reap the business and brand benefits that come along with it.
