Leave 'warranty' out of the service contract pitch

F&I managers encourage customers to buy a service contract, not a “warranty,” but does the sales team?

They should. A recent CDK Global study that looked at the language of car descriptions on review websites showed that sedan buyers and recent college graduates were less likely to visit a dealership’s website if the word “warranty” was included in the vehicle description.

CDK’s study included female car buyers, Gen X consumers, new parents and recent college graduates.

“The needs of those graduating college are going to be much different than those of new parents. Our latest research examined the words that would eventually lead buyers of different demographics to leave a review website and head to a dealership site,” Jason Kessler, lead data scientist at CDK Global, said in a statement. In this year’s Language of Closers study, “we were able to pinpoint specific words that shed valuable light on what vehicle traits matter most to women, Generation-X consumers, recent college graduates, and parents.”

The word “warranty” is commonly tossed around the industry interchangeably with “vehicle service contract.” F&I managers know the difference between a manufacturer’s warranty and a service contract. Dealership employees are ideally all on the same team, so sales associates should emphasize the difference, too.

Switching up their vocabulary could result in more F&I success. Maybe more sedan buyers and recent college grads will invest in a service contract when the word “warranty” is left out of the pitch.

You can reach Hannah Lutz at hlutz@crain.com

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