Spitzer Automotive boosts sales with a better warranty program

A package of new- and used-vehicle warranties with new certified pre-owned programs is helping Spitzer Automotive Group of Ohio, Pennsylvania and Florida get customers in the door during a period of low inventory.

Last year, the group introduced its "Spitzer Shield," a suite of benefits that includes a nationwide lifetime powertrain warranty on new vehicles and a 7-year, 100,000-mile nationwide powertrain warranty on vehicles bought through its CPO program.

The group introduced the Shield after it began to reevaluate its stores' value proposition to customers in their markets, COO Andrew Spitzer said. He said the group found it wasn't competitive enough with other dealerships that were offering 20-year, 200,000-mile warranties on new vehicles.

"I saw that and said, 'All right, I respect that. Now let's beat it,'" said Spitzer, a 2022 Automotive News 40 Under 40 honoree.

"We've been in business since 1904, but is that going to be the thing that makes a person want to buy a car from you? No. You have to be competitive, first and foremost," he said.

"It's a copycat league in a way," he said. "That feels good."

Since introducing the Shield, Spitzer said the group has seen new inventory levels turn at a faster rate, though he noted it was tough to say what role low inventory levels industrywide played in that. But because the dealership group is looking to boost its brand awareness "as high as it can," it is promoting the new warranties as a headliner to draw customers to the store, Spitzer said.

"That way, once we do have more cars on the ground, we're going to be top of mind and people will know what we have to offer," he said. "We're viewing this as a long-term approach."

Competitors in some of the group's 23 markets have since introduced lifetime warranties of their own as a way to match the Spitzer group's offerings, he said.

Spitzer Shield came about as the group began to turn more of its focus to used vehicles amid the new-vehicle inventory crunch. The group launched its own certified pre-owned program, which includes the 7-year warranty, as well as benefits including a 3-day, 300-mile vehicle exchange guarantee, free service inspections and a 172-point inspection before a vehicle is put up for sale.

Spitzer reports that its used-vehicle sales rose 45 percent from 2020 to 2021, compared with a 29 percent jump in new-vehicle sales.

The group attributed some of that success to the launch of the CPO program and its new management and marketing emphasis on used-vehicle sales. Spitzer declined to reveal any sales figures.

"We've had to do some soul-searching and really get familiar with the pre-owned side, and to the credit of my team, they've done a great job," he said. "They've been aggressive and have taken some risks that they normally wouldn't, and they've learned a lot."

Not having a CPO program can be a deal breaker for a lot of customers, Spitzer said, so offering a program of its own has helped the group's salespeople reach out to more customers.

"I know when I sold cars, I loved selling the certified pre-owneds, and my only real complaint was that when I sold at my Kia store, I couldn't sell any CPO Fords or Chevys," he said. "Now that's not the case."

The powertrain warranties Spitzer offers have also helped drive up the group's F&I revenue. The group has sold more seal coats for interiors and exteriors, prepaid maintenance packages, and other products and offerings since introducing the warranties, according to Spitzer.

"The customer recognizes the differentiator we have with a strong warranty," he said. "That helps them to get into that mindset of thinking, 'How do I protect this purchase?'"