JAMIE LaREAU

Another case for bundling

Jamie LaReau covers auto dealers for Automotive NewsJamie LaReau covers auto dealers for Automotive News
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F&I managers like to bundle products, with good reason. The practice typically spurs sales of other products.

For example, the Larry H. Miller Automotive Group of Cos. had been pre-installing Total Care Auto Etch on all its cars since 2006. But it had meager Etch contract sales for a long time.

Etching is a theft-deterrent product that uses traceable identification codes in conjunction with anti-theft warning decals to prevent vehicle thefts.

In 2006, the Miller group, now the 10th largest dealership group in the country, sold about 31,000 Etch contracts on sales of about 75,000 new and used vehicles, says Robert Enger, president of the Sandy, Utah, company’s insurance division.

But in 2012, the company doubled Etch contract sales to 62,000 on the same number of total vehicle sales, he says.

Sales started to improve, he says, when he began bundling Etch with an identity theft recovery product in 2009.

Identity theft is a big concern among many Americans. According to a survey by Javelin Strategy and Research, about 12.6 million Americans were victimized by identity theft in 2012, the second highest total since 2003 when the Federal Trade Commission started counting victims.

Every vehicle at Larry H. Miller Group, new or used, is pre-loaded with Etch and one-year of the identity theft recovery product Vero. So if the customer opts to not buy Etch, they still get a year free of Vero, Enger says. If they buy Etch, they get Etch and Vero for five years. And Vero protects them and any family member residing with them, Enger says.

On average, the package retails for about $189, leaving the dealership about $100 before expenses.

“The most effective training message is to show the customer news videos of identity theft,” Enger says. “Once the F&I consumer sees that and how low cost it is to the consumer, it practically sells itself.”

He adds: “This is an easy way to increase gross.”

You can reach Jamie LaReau at jlareau@crain.com. -- Follow Jamie on Twitter

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