Service Payment Plan, of Chicago, offers a 0 percent financing program for extended-service contract marketers. Customers include several captive finance companies, automakers and independent F&I vendors, Hymen said.
Keep it simple
Dealerships should make selling extended-service contracts in the service lane as straightforward as possible, Hymen said.
That means keeping the customer, the transaction and the compensation in the service department, as opposed to sharing with the F&I office, he said.
"What we recommend is to keep the sale in the service department. Have the gross (profit) go to the service department," Hymen said. "If an F&I manager is the person who closes the deal, then reassign the F&I person to the service department.
"What we never seem to see work is to move the service customer to the F&I department," he said. "If it's sold in the service department, the service manager has to be the biggest beneficiary."
Holbrook, a fixed-operations consultant for Service Payment Plan, who was also at the interview, said that selling extended-service contracts needs to be a routine, to be an expected part of the service department, not an add-on.
"When it doesn't work, it doesn't work because it belongs to nobody," Holbrook said. "It needs to become like your Customer Satisfaction Index or hours per repair order or like any other measure. The general manager has to make that accountability clear to the service manager. You have to simplify it for the service adviser. Everybody has to be made accountable -- just like you do for a lot of other things already."
Spur employees with cash
Hymen said service advisers who are already stretched thin don't like it when they get the additional, unfamiliar duty of selling extended-service contracts.
Holbrook added that until selling those products becomes routine, it's hard to beat cash payments as a way to ensure service adviser buy-in.
"The magic number seems to be $100 per contract," he said, with opportunities to earn an extra spiff for achieving certain stair steps. "What really works is cash in hand."