How a service manager spurred the F&I office

Nestor Alvarez, service manager at Land Rover North Dade in Miami, says selling extended-service contracts in the service lane has had a side benefit of motivating the store's F&I department to sell more service contracts, too.

The dealership has been promoting and selling extended-service contracts in the service department for about two years, including a continuing campaign with the slogan "Ask Nestor" about a service contract.

Sales are still increasing, he said, but the rate of growth is slower because service customers who have already bought an extended-service contract don't need another one any time soon.

Meanwhile, he said, extended-service contract sales penetration more than doubled for the F&I department. Land Rover North Dade is part of the Warren Henry Auto Group, which has six locations in Florida.

Alvarez spoke with Special Correspondent Jim Henry.

Q. How is the "Ask Nestor" campaign going?

A. We changed our philosophy a little bit on that [in 2012]. When they saw how well we were doing, it motivated the finance department to get back on board their own program a little bit. They saw how we were getting all this business.

What's your sales penetration in the service department?

Penetration on customers that we have advised on contracts is about 15 percent sold. Remember, not everyone qualifies because their cars are either too old or have too many miles. But of those we advise, that would be correct. Every car that qualifies gets a quote.

Are sales increasing over time?

We did sell a tremendous amount. Obviously, once somebody bought one, we couldn't keep reselling them.

What's the penetration in the F&I department before and after the "Ask Nestor" campaign?

They close about 90 percent. In the past they were at 40 percent.

That's quite an increase. Are they giving it away just to get the service business?

We can't discount policies in Florida. We'd rather discount the car. What I mean is you can't discount insurance policies in Florida. If your price is $3,000, you can't say, "I'll sell it to you today for $2,500." We would rather discount the car and attach a warranty than not sell the warranty.