When Steve Ward brainstorms a sales approach for F&I products, he rifles through his closet of auto parts.
"I've got an ABS brake actuator sitting on my desk," Ward, business manager for Marion Toyota in Marion, Ill., told Automotive News.
The actuator "went bad on a 2010 Tundra." The part went defective when the electronics on the side of it failed. The repair costs $4,500. If that part fails on customers, he said, "they lose their ABS, skid control, and the dashboard lights up like a Christmas tree."
When Ward walks his customers through the F&I product menu, he relies on defective parts and repair order slips to show the value of the add-ons he's selling. Since he started selling this way four years ago, he says his F&I product profits have increased by nearly half.
When F&I managers go through product options with customers, Ward said, they often get the response, "I'm not going to buy anything." When Ward gets that response on a vehicle service contract, he tells customers he's surprised they would pass.
He shows them the factory warranty and explains it will cover their vehicle for a certain number of years, but if they are financing the vehicle for longer than that, their coverage will end before their loan does.
That gets customers to listen, he says.