Wednesday, Jul. 01, 2020, 11:44 AM
While the coronavirus pandemic has created plenty of headaches for dealerships, the ramifications appear to be creating at least one opportunity for store F&I departments.
Sales of vehicle service contracts post-sale first spiked in March and then again in April and May as dealers slashed marketing budgets and shifted focus to existing customers, according to new data from Automotive Product Consultants (APC).
APC executives said this week that sales of its second-chance service contracts improved by 64% in March, the highest year-over-year gain since the current agent-dealer program was launched in 2006. Strong sales continued with year-over-year increases of 39% in April and 31% in May.
“The moment the pandemic hit, we saw response rates and close rates go up as customers were sitting at home, reading and responding to marketing from their dealers,” APC president Kyle McEvoy said in a news release.
“In addition, we’ve seen F&I agents — many of whom had their windshield time taken away — now urging dealers to adopt the program to pick up incremental post-sale revenue at a time when it’s sorely needed,” McEvoy continued.
Dan Haugen, chief sales officer of Portfolio, a longtime APC partner, said his company reminded its agent network about the program in a mid-April bulletin.
“The response was highly encouraging, and we are looking forward to seeing the long-term results,” Haugen said. “The more car buyers we can protect, the better, and the current environment demands ingenuity.”