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Ding-and-dent products gain from leasing, bundling

It’s a case of unintended consequences.

Sales of so-called ding-and-dent products have increased at some dealerships, benefiting from two unrelated trends: the rise of leasing and wider use of short menus in the F&I office.

The rise of leasing has F&I managers looking for products that serve those customers, who in turn are looking to maintain their vehicles’ appearance and thereby avoid being dinged themselves by end-of-lease charges for vehicle damages.

Second, as F&I menus got shorter, ding-and-dent product vendors realized they were at risk of falling off the menus. So they have bundled their products into more inclusive packages of appearance products, which appeal more to consumers and F&I managers alike.

A ‘no-brainer’

Today, buying ding-and-dent coverage is a “no-brainer” for customers, said Bryan Steele, finance manager for Plaza Motor Co. in Creve Coeur, Mo., west of St. Louis.

His dealership includes ding-and-dent products from Dent Wizard, a veteran vendor of such products, on its menu.

In the last two months, Steele estimated that he sold 93 Dent Wizard policies at the Mercedes-Benz dealership out of 150 new and used vehicles for which he handled the financing. Virtually all of the customers who took the policies opted for an all-inclusive, so-called bundled upgrade from the basic ding-and-dent coverage, he said.

“Those high-end cars, they’re expensive, and people want them to stay nice. It also improves the value when you do trade it in,” Steele said in a phone interview.

A majority of customers at Plaza Motor, along with those at many Mercedes-Benz stores, lease their vehicles. High lease penetration also makes ding-and-dent products attractive to the dealership because lease customers don’t usually buy service contracts or guaranteed asset protection, or GAP, Steele said.

Making a bundle

On average, Steele said his sales penetration rate for all Dent Wizard products is about 60 percent, or roughly twice what it was a few years ago for ding-and-dent products alone.

Several years ago, Dent Wizard, of St. Louis, realized it had to fight to keep a place on F&I menus when the trend toward shorter menus and fewer ancillary products gained momentum as a way to save time and avoid overwhelming customers with too many sales pitches.

So about two years ago, the company added optional features and benefits to its basic ding-and-dent coverage, including windshield chip repair, cosmetic wheel repair and coverage to pay a customer’s deductible for hail damage, Aaron Cooper, national director of F&I for Dent Wizard, said.

The base coverage is still available by itself, but Dent Wizard also joined an industry trend by creating a bundled product -- offering several products for one price, instead of pitching each separately. That keeps the menu short and cuts the customer’s time in the F&I office.

Just glad to be here

Cooper said Dent Wizard doesn’t expect to be at the top of the F&I menu. Opinions vary, but many F&I trainers who extol short menus say five items is the limit. Extended-service contracts and GAP are usually the first two items.

“Are we No. 1 or No. 2 on a menu? Absolutely not,” Cooper said. “We are still in the category of ancillary, appearance programs. Now we’re anywhere from No. 3 to 4 to 5, behind service contracts, GAP, tire and wheel.”

For luxury brands such as Mercedes-Benz, Lexus or BMW, Cooper said, Dent Wizard is more likely to be No. 3 than No. 4. For a Honda or Chevy store, it’s the other way around.

“Four or five years ago, we were lucky to be on a menu, to be honest with you,” Cooper said. “But in the past four or five years, we gained some ground.”

Dent Wizard, founded in 1983, is privately held and doesn’t publish its sales numbers, Cooper said. But he said through the first quarter of 2014, sales were up about 20 percent vs. a year ago. He said sales were up 65 percent in 2013 vs. 2012, and up 78 percent in 2012 vs. 2011.

You can reach Jim Henry at

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