HOW TO COMBAT A CREDIT UNION STEALING YOUR WARRANTY BUSINESS

-          By Paul Potsiadlo

Like anything, if you are trying to convince someone of something after they have made up their mind; you chances of success are very low.

Some credit unions will use this tactic, since they have the trust of the customer for a car loan at a very competitive rate, they will talk to the customer about a warranty to cover their investment.   Sometimes the credit union will tack an extra six months on to the loan if the customer takes the credit union’s Vehicle Service Contract and many times the vehicle service contract they are selling is less expensive due to lower markup than the one the dealership is trying to sell. 

To be able to combat this situation save some of the vehicle service contract deals, the dealer must be aware of what it happening and why, and needs to be trained on how to preemptively counsel the customer on what is going to happen when they go to get the check.

The dealer must agree to fight for his profits on vehicle service contract’s and will need to spend some time with the customer in advance of them going to the credit union to get their check.  PASS system know how the customer will pay for the car, ask questions.

Present and explain the vehicle service contract to the customer following our PASS guidelines.  On credit union customers where the credit union is known to steal the business, explain to the customer what will happen when they go to the credit union and how and why the credit union will try to sell them their vehicle service contract. 

Let them know the credit union is interested in increasing the amount of the loan at whatever interest rate, to generate more income on the books.  They have a “branded” vehicle service contract they will be using but once the deal is done the credit union will have no input into any claims situation.

Explain to the customer why your dealership is dealing with Preferred Warranties, PWI is in the vehicle service contract business, not the finance business and everyone working for PWI is an employee of the company, not someone working for just a commission, or a disinterested third party claims adjuster. Explain customer service, length of time in business, and a relationship to help the dealer’s customers, point to plaques, awards, and point of sale materials in the office.  The dealer must let the customer know he is looking for a customer for life, regardless of where they get money to buy the car. The dealer must let the customer know that even if he does not chose to cover his car with a PWI warranty, the dealer wants to help his customers down and road and can suggested repair facilities if his vehicle is not covered under a vehicle service contract.  The dealer must let the customer know he will make a small but reasonable mark up on the vehicle service contract, but he is in the car business and like everyone needs to make a profit.

To empower the customer when he talks to the credit union rep, have the customer ask that person, “What is the BBB rating of the vehicle service contract Company you are trying to sell me?”  Use those exact words.  Have the customer ask next, on a 36 month vehicle service contract how many miles of coverage are you trying to sell me.  (Sell me)  If the dealer has presented a Premier plan, ask is the coverage you are trying to sell me an exclusionary plan or is it listed coverage. (How many people at a credit union can answer that?)  There are a lot of questions you can arm your customer with, ignition management controls, roadside, check engine light coverage,

Getting a live person on the phone, ect. 

The dealer must be committed to saving the deal and vehicle service contract for himself and must be able to think on his feet, customizing the question to the customer and vehicle service contract plan.  It must be pre emptive and the dealer must remember, he can influence the outcome, but no one bats a thousand.