Tag Archive | "Trade-In Protection"

Trade-In Protection: A Product Everyone Can Relate To


I remember walking into dealerships in 1988 with our first GAP program and thinking the sale would be a slam-dunk. To my surprise, dealers told me that while they liked the product, they did not want their F&I departments scaring customers about negative equity. Today, times are clearly different. GAP has become one of the top products offered and accepted by customers nationwide.

Unfortunately, with the recent financial crisis, everyone intimately knows about negative equity. It is on the news almost every night, and many of our customers have experienced it first hand on their homes, cars or anything they have financed. While GAP provides a stated benefit for negative equity in the event of a total loss, and has paid hundreds of millions of dollars in customer benefits, there have been very few, if any, programs for dealers to offer that cover negative equity when a customer needs it most: when they trade-in their vehicle.

Over the past several years, there have been a few programs introduced by manufacturers or independent providers that offer negative equity protection at trade-in time. In most cases, these programs have been provided at no cost to the customer. On a large scale, Hyundai Assurance was the first to introduce this type of program. Hyundai offered a trade-in value guarantee with the purchase of a new Hyundai. As part of the customer’s responsibility to qualify for this benefit, the customer had to perform all scheduled maintenance with a Hyundai franchise, and finance the vehicle with Hyundai Motor Finance. Hyundai’s program has clearly benefited: Hyundai Motor Co. by elevating customer loyalty to one of the highest in the industry; Hyundai dealers by driving more sales and maintenance revenues; Hyundai Finance by lowering the potential negative equity carried over on new loans; and Hyundai customers by reducing their negative equity carry-over and giving them peace of mind during the purchase process.

Hyundai Assurance was a national success story, and it got people thinking. Enter the agent-distributed trade-In protection product.

With any new F&I product introduction, there were some early adopters, but many tend to wait, and see the product-related success stories from other dealers before making the investment themselves. In the beginning, two and a half years ago, we heard the same thing over and over again. Who is selling it? How long has the program been in the market? I like it, but want to wait. While it was somewhat discouraging, it also helped me realize and reinforce something much more important: If you get in the door, no matter the outcome of the sale, you have a way to begin to build a relationship as a partner. Going back in time, GAP was the same way. While we may not have closed each dealer the first time, GAP started more relationships than any other product I had been involved with, and set our agency apart from others in the market.

Setting your agency apart from others is more important today than at any other time I can recall. While there seems to be a new program launched every year, trade-in protection is an innovative customer retention tool, providing protection against potential negative equity when the customer returns to trade-in and purchase a new vehicle at the dealership where the original purchase was made.

Different from most other F&I products, trade-in protection has been most successful as a blanket program for select dealers in a defined market, rather than a stand-alone F&I product that the customer pays for. As a blanket program, the agent must spend a substantial amount of time creating the culture, training sales consultants, sales managers and the F&I department so that they can explain the benefit properly to every customer. This allows the agent to build a relationship beyond the F&I department, which is critical in expanding other products sales.

Another critical component is an embedded loyalty marketing campaign that includes targeted customer communications designed to provide a higher level of customer engagement during the vehicle ownership period. These messages are driven not only to remind the customer of the benefit, but also to offer maintenance or other dealership specials. At its core, the trade-in protection program is a customer retention tool that can increase overall dealer profitability for years to come. All in all, this product provides unique benefits to the agent, dealer and end customer:

For the agent:

  • Helps agents stand-out from the competition.
  • Opens doors into new accounts for all products.
  • Generates additional blanket and F&I profit opportunity.
  • Creates a long-term relationship with the dealership.

For the dealer:

  • Helps dealers stand-out from the competition as a “Why Buy Here” product.
  • Increases dealership traffic, front-end and F&I profits.
  • Boosts customer retention and improves customer satisfaction levels.
  • Expedites the trade-cycle.

For the customer:

  • Builds confidence in the decision to purchase.
  • Protects against negative equity at time of trade-in.
  • Can purchase a new vehicle much sooner than before.

Once a customer buys a vehicle that includes trade-in protection, that customer has something that no other dealer can offer them when they are ready to trade-in and buy again.

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Family First Dealer Services Signs Deal With Mudd Advertising for Trade-In Protection Dealerships


JACKSONVILLE, Fla. – Family First Dealer Services LLC (FFDS), based here, and Mudd Advertising Inc. of Cedar Falls Iowa, launched a new marketing and advertising system available to Trade-In Protection (TIP) dealerships nationwide. Trade-In Protection is designed to minimize or eliminate negative equity when taking vehicle trade-ins.

“Being the first to launch the Trade-In Protection program nationwide over a year ago, we realized quickly that the key to a dealer’s success lies in building TIP into the dealer’s marketing messages. This means to imbed it inside each dealership with co-branded materials – from TV spots, radio, Web site, mailers and custom point of sale materials to show their customers the commitment the dealer has made to each of them,” said Tony Wanderon, CEO of Family First Dealer Services.

Through this partnership, Trade-In Protection dealerships have access to the full suite of advertising and marketing services provided by Mudd. TIP dealers across the country will have access to marketing packages designed by Mudd and FFDS to optimize total market potential.

“Marketing the Trade-In Protection program exclusively for our dealer group was the whole key for us,” said Randy Hoffman, Executive Director of Ed Morse Automotive Group in Tampa, FL. “These guys flat out get it. TIP is driving big traffic for us today and is building loyalty for us in the future. No one else is doing what they have.” Trade-In Protection provides a consumer protection benefits of up to $5,000 to offset trade-in negative equity. Customers must trade-in and purchase another vehicle from the original TIP dealer they first bought from in order for their vehicle to qualify for protection package.

The program is available on both new and used vehicles with benefit levels available of $1000, $2500 and $5000. Dealers chose between a traditional product offering of TIP in the F&I office, or utilize the model where TIP is included at no charge to each of the dealers financed customers. This allows dealers to advertise the FFDS TIP program exclusively in their market area, and creates a unique offer to help drive traffic, closing ratios and customer retention.

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Family First Dealer Services and BBVA Compass Bank Announce Lender Approval of the Trade-In Protection Program


JACKSONVILLE – Family First Dealer Services LLC and BBVA Compass Bank announced the addition of Trade-In Protection to its approved list of optional products for sale through its’ Motor Vehicle Retail Installment Dealers.

Trade-In Protection is an optional product which provides a benefit of up to $5,000* towards a customers’ potential negative equity, when they return to the original selling dealer to trade-in and purchase another vehicle if they owe more than what their vehicle is worth.

“TIP is a home run for our dealers,” said Matt Morse of BBVA Compass Bank. “As we are expanding our indirect lending footprint, we were looking for something to offer our dealers that show we are interested in both their profitability today, and their long-term success. TIP helps get that job done.”

TIP combines the retention benefit of a lease – but applied towards a finance contract – as the benefit is redeemable only at the original selling dealership during the trade-in process.

The program is offered on new and used vehicles as an optional F&I program, a blanket program and a combination with benefit levels from $1,000 – $5,000.**

“Partnering with BBVA Compass is extremely exciting,” said Tony Wanderon, CEO of Family First Dealer Services.

“The ability for the dealers who do business with BBVA Compass to add Trade-In Protection to their loans shows the commitment that they have to them and their customers. We look forward to working with the dealers in the Compass market and to a long term partnership.”

*$5,000 max benefit on new vehicles / $3,500 max benefit on used vehicles
**Program and coverage may vary by dealer/state/lender. Please refer to the TIP Agreement for additional terms, conditions, limitations and exclusions.

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Family First Dealer Services and Trade Cycle Management Announce Strategic Partnership and Launch of Trade-In Protection Program


JACKSONVILLE – In response to the demands of consumers and automobile dealers to protect future Trade-In Values, FFDS & TCM announce the Trade-in Protection Program. TIP was designed to minimize or eliminate future negative equity of vehicles (upside-down customers) and create all new levels of customer loyalty.

TIP combines the retention benefit of a lease – applied towards a finance contract – as the benefit is redeemable only at the original selling dealership during the trade-in process. The program is offered on new and used vehicles as blanket, optional, and combination with benefit levels from $1,000 – $5,000.

“TIP is just the beginning of new, innovative offerings FFDS will be launching over the next 18 months,” said Tony Wanderon, CEO, Family First Dealer Services. “TIP brings value to consumers, dealers and lenders, by eliminating uncertainty with trade-ins, unlike GAP that provides coverage in the event of a total loss. It sets clear expectations up front with the customer allowing them to have an overall better experience during the ownership period.”

“It’s exciting to join forces with FFDS,” said Brian Olson, VP Sales / Marketing for TradeCycle Management. “The leadership and staff at FFDS are the best in the business and understand how to launch a new program. Even more, they understand the value of managing the tradecycle and what that brings to the customer, dealer and lender.”

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