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.