Have you ever had a customer say this to you? “I get GAP insurance through my insurance company for half the price of yours.”
Most likely you have, and your initial feeling was probably frustration because you know the insurance company’s GAP is not as good as your GAP. You get what you pay for, and there are several reasons the customer should go with your GAP. In these instances, your customers need someone to educate them on the differences between GAP products. Here are four things you can convey to your customer to help educate them on product differences.
What happens when you have GAP through your insurance company, but then you decide to shop your insurance bundle, i.e. Home, Auto, Life? If you find a better deal and make the switch, you will lose your GAP coverage immediately. Since you are not able to purchase GAP after the sale, you will be left without this protection.
If you have GAP through your insurance company and you are in a car accident and your car is totaled, you will have a double claim. One claim for the accident, and a second claim for the GAP insurance. The result will be a significant increase in your monthly premium.
Most GAP policies through insurance companies only pay out 115% loan to value, compared to 150% loan to value with our GAP. The last thing any customer needs to experience is going through the trauma of a total loss, thinking the GAP from their insurance company will allow them to walk away from the car and the loan free and clear, only to find out that the GAP didn’t completely satisfy the loan. However, at 150% with our GAP, the loan will be satisfied.
Most GAP policies through insurance companies will not cover any negative equity from a prior loan that is rolled into the new loan. This defeats the purpose of GAP insurance!
Chances are good that most car buyers do not have this information, and do not think about these concerns. After reviewing these points, continue on a word track that goes something like this.
“Most of our customers take our GAP to avoid everything we just talked about, even though it costs more than the GAP through your insurance company. But here is what we can do for you: come back to the dealership when you are about halfway through your loan, and we will do an appraisal on your car to determine the value at that time.
GAP is needed most when you are exposed to negative equity. Typically, once you are halfway through your loan, your car is worth what you owe the bank, and you no longer need GAP. If that’s the case, we will cancel your GAP and you will get a refund for the portion (half) you didn’t use, which means you will have paid what you would have for your insurance company GAP but you get the better product and can avoid those four concerns.”
Do we want the customer to cancel GAP and create a chargeback? Of course not. However, we do want the customer to have the better product to protect them. Our goal is to first and foremost do all we can to ensure that our customers are happy and taken care of. One way or another, this philosophy will result in future sales and loyal customers, and that’s what it’s all about.
ABOUT THE AUTHOR: Adam Yoder joined EasyCare in the fall of 2021 with APCO Holding’s acquisition of Strategic Diversified. Adam serves as a Regional Director for EasyCare and brings 14 years of automotive experience with him. Adam is passionate about developing people, processes, and being a genuine partner with dealers.
Originally posted on F&I and Showroom