Tag Archive | "Service Payment Plan"

Payment Plans Mean More Options for Selling Service Contracts


In today’s dealership, F&I products are a big part of the revenue stream. And in the F&I department, vehicle service contracts (VSCs) contribute a large amount to that bottom line. But while there will always be customers who decline to invest in a VSC, what about those who are interested, but, for one reason or another, can’t purchase — they don’t qualify for the additional amount as part of their loan; they were pre-approved and cannot deviate from that total; or they are a cash customer, with no loan at all? In those types of scenarios, does the dealership forego selling a service contract?

In many cases, the dealership looses the potential sale, but there is another option — VSC payment plans. Paylink, Service Payment Plan and Omnisure Group all sat down with AE Magazine to talk about what the product is, and why agents should care — and they all agree on the same reason.

“One of the most important things is that with just a little bit of effort, the agent and dealer can really add some significant revenue to the bottom line,” noted Rebecca Howard, CEO, PayLink. “From the agent’s perspective, there is very little effort to introduce it to the dealership.”

Robert Hymen, president of Service Payment Plan, agreed, noting, “Every dealership has a number of opportunities to use a payment every month. It is easier to increase a dealer’s business than to conquest a new dealer. If every dealer an agent works with sold just five more contracts a month, they would add considerable volume to their business. Every time a payment plan is used it is an incremental contract that otherwise would not have been made.”

“This product will increase their sales and income by allowing a customer, that wasn’t able to pay in full, an option to make payments over time for a product they benefit from in the future,” agreed Ed Walder, president, Omnisure Group

All three work in similar ways — they work with the providers and administrators to set up agreements, allowing the customer to pay for the service contract in no-interest monthly amounts; the average time to pay off the contract was 18 months. In all three companies, electronic debiting of the customer’s account each month is the preferred form of payment, although PayLink and Omnisure both noted that they want to work with the dealership to set up the best plan for them, which can include alternatives like a mailed check every month.

Beyond F&I
One of the key benefits for agents is that VSCs can be sold more easily outside of the F&I office, leading to more contracts and more sales overall. While all three companies noted that there are multiple ways a dealership can take advantage of that flexibility, the most common place outside of F&I they see the VSCs being sold is the service drive.

“The service drive is an excellent place to sell service contracts,” said Hymen. “This will be a growing area. It is when the customer is in service that they realize things can and do go wrong with their car. What better time to tell a customer, ‘today’s repairs are covered by your manufacturers warranty. It is a good thing this was still under your warranty because otherwise it would cost X dollars but in x number of months or miles you will be responsible. You are still eligible to purchase a service contract for as long as you plan to own your car and can pay for it monthly, interest free over 18 payments.’”

Walder agreed, noting, “The key is selling a good VSC matched with consumer-friendly payment plans that properly compensate the dealership at all levels. A service department should be able to share in the sale, as well as receive the long term benefit of performing service under the contract.”

PayLink’s Howard agreed, but noted that the service drive isn’t the only place a dealership can take advantage of added sales. One example she pointed out is in dealership newsletters to customers who purchased a car — with a payment plan, the dealership can offer the VSC as an after-sale product at any point, providing a potential revenue stream that, for most dealerships, is completely untapped right now.

Hymen added that he believes the F&I manager should always be the first one offering a service contract, and should always try, at least, to sell it the traditional way. For him, offering payment plan options should be the second line of defense in F&I, and from there should be a tool used to increase sales at other customer touch points.

Overall, one thing is clear — payment plan options are easy for agents to add to their portfolio, and are an easy way to increase revenue for everyone involved. They allow dealerships to makes sales that they otherwise would have lost, or, alternatively, capture sales that today they aren’t even going after. And even a few more contracts sold per month can make an impact on the bottom line.

VSC Payment Plan Roundup

Omnisure Group

Omnisure Group
Ed Walder, President

In your opinion, what do most agents need to know about this type of payment plan in general that they don’t already?

It is a ZERO/NO interest payment plan to the consumer and increases dealer revenue.

Read More »

Paylink

Paylink
Rebecca Howard, CEO

In your opinion, what do most agents need to know about this type of payment plan in general that they don’t already?

One of the most important things is that with just a little bit of effort, the agent and dealer can really add some significant revenue to the bottom line. It allows them to sell service contracts they might not have been able to sell, such as times when they weren’t able to qualify the customer, or incorporate it into the loan, or it was a cash buyer, etc.

Read More »

Service Payment Plan

Service Payment Plan
Robert Hymen, President

In your opinion, what do most agents need to know about this type of payment plan in general that they don’t already?

Every dealership has a number of opportunities to use a payment every month. It is easier to increase a dealers business than to conquest a new dealer. If every dealer an agent works with sold just five more contracts a month, they would add considerable volume to their business.

Read More »

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Service Payment Plan


Robert Hymen, President

In your opinion, what do most agents need to know about this type of payment plan in general that they don’t already?

Every dealership has a number of opportunities to use a payment every month. It is easier to increase a dealers business than to conquest a new dealer. If every dealer an agent works with sold just five more contracts a month, they would add considerable volume to their business. Every time a payment plan is used, it is an incremental contract that otherwise would not have been made.

A payment plan will be used in the following situations in the F&I office. 1. Cash buyers. Everyone loves a deal. Cash buyers will often say yes to 0% interest versus writing a check for thousands of dollars. 2. Customers who want a lower car payment and don’t want to be paying for a service contract and paying interest for 72 months or more. 3. Customers where the advance from the bank will not allow the service contract to be added into the car payment. 4. Credit Union customers who have been pre- approved for an amount, or have been offered a service contract at the credit union. 5. After market sales of service contracts.

Why should an agent add this to their product mix, if they don’t already offer it?

If they don’t, their competition will.

Do you see this as being exclusively an F&I product, or something that could be sold in the service department as well? Why?

The service drive is an excellent place to sell service contracts. This will be a growing area. It is when the customer is in service that they realize things can and do go wrong with their car. What better time to tell a customer, “today’s repairs are covered by your manufacturers warranty. It is a good thing this was still under your warranty because otherwise it would cost x dollars but in x number of months or miles you will be responsible. You are still eligible to purchase a service contract for as long as you plan to own your car and can pay for it monthly, interest free over 18 payments.”

Can you walk me through how it works, from the time the agent places it as an option in a dealership, through the end-customer using it?

F&I managers will always attempt to sell the service contract, and have the cost added to the car payment. It is when the customer says no, or when he cannot get enough money from the car lender that the F&I manager will present the ability to pay for the contract monthly, interest free over 12 or 18 payments. The dealer will then complete our forms either electronically or by hand, and submit the paperwork to SPP and their service contract company. SPP will then notify the customer of their payments and will debit their credit account or checking/savings account accordingly.

What are the biggest pros to the service payment plan product? What, if any, are the negatives? How can an agent overcome those?

It will result in incremental sales, more revenue up front and more satisfied customers returning to the dealership. There are no negatives to using SPP.

What makes your product, specifically, unique from your competition?

Professional training of agents and dealers, as well as outstanding service to the dealers, customers, agents and administrators sets us apart.

Do you see any changes to the product going forward? If so, what are they? If not, why not? What, if any, trends might affect it?

No. However I do believe more and more dealers will automate the way they do business with SPP.

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Service Payment Plan Integrates with StoneEagle’s SEcureSalesTool


DALLAS — The StoneEagle Group has integrated Service Payment Plan Inc. (SPP) with its SEcureSalesTool, which will automate the contract generation and submission process for SPP.

This integration will allow the service and F&I departments to streamline the process of selling service contracts to their customers. The SEcureSalesTool accurately calculates the monthly payment, based on the down payment, generates the SPP contract electronically, stores the payment information, and automatically delivers the data to SPP’s administration system, as well as the corresponding vehicle service contract administrator.

“The SEcureSalesTool is an essential point-of-sale solution designed for dealers to maximize revenue on the service drive or within the F&I office,” said Jason Gillette, director of sales and marketing for StoneEagle.

SPP is the largest service contract payment plan company in the industry, and offers programs to independent service contract providers and manufacturers, throughout the United States and Canada. The payment plans can range from 12 to 18 months in length, depending on the term of the service contract. Electronic debit to checking account, savings account or using a credit or debit card keeps the payment plan paperless and hassle-free. All customers that purchase a vehicle with cash, outside financing or limited financing, can benefit from SPP’s zero-percent interest monthly payment option.

“I am excited about our relationship with StoneEagle and our integration to their SEcureSalesTool because it makes it much easier and more efficient for dealers to do business with SPP and benefit from our interest-free payment plans for service contracts,” said Robert Hymen, president of SPP.

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