When you sell a service contract there are no cars to buy, no cars to transport, nothing extra to advertise, nothing to clean, nothing to fix and, most importantly, nothing to worry about after the sale.
Reading, PA (PRWEB) March 15, 2012
In Spring of 2011, independent dealer Mike Bowers was discussing his strategy for boosting the profitability of used car dealerships even in tough economic times. Since then, his casual comments have led to two major speaking engagements and continued industry publicity, including an article that he wrote being a featured premium in a direct mail campaign released this month.
“With increasing competition from franchised dealers and the pricing stresses caused by the shift of our businesses toward the Internet, many independent dealers of pre-owned vehicles are finding it more difficult than ever to make a solid profit,” says the partner and general manager of John’s Great Cars, located in Reading, PA. “We as independent dealers tend to spend so much time handling the day-to-day business of buying and selling cars that we fail to see the easiest opportunity to stay profitable under the current economic conditions.”
According to Mr. Bowers, a refocus on back-end profits is essential for independent dealers of pre-owned vehicles to sustain success in today’s changing marketplace.
Mike explains his perspective in a two-page article, “The Easiest Money a Dealer Can Make.” The article, which details how the sale of extended service contracts plays a major role in the on-going profitability of his business, has received widespread industry attention since its release last summer. In July, he was a guest speaker at the 2011 GIADA Convention & Trade Expo 2011 in Stone Mountain, GA. In December, he spoke at Preferred Warranties (PWI) annual sales meeting in Orlando. PWI offered copies of the article as an incentive in a January direct mailing, and in a second mailing that went out this month.
“The response to the article has been amazing,” says Mike, who wrote the “The Easiest Money a Dealer Can Make” as a favor to Wayne Herring Jr., Preferred Warranties’ national sales manager. “I was telling Wayne how selling PWI service contracts was making big money for us, and he asked if I could put my comments down on paper so he could share them with his sales team. It has drawn much more attention than I ever imagined.”
Following are excerpts from “The Easiest Money a Dealer Can Make”:
“When you sell a service contract there are no cars to buy, no cars to transport, nothing extra to advertise, nothing to clean, nothing to fix and, most importantly, nothing to worry about after the sale.
“Since our commitment to selling contracts began in earnest, we have sold contracts to customers who I never thought would buy, including several mechanics who know what it costs to fix a car in today’s market. Now I venture no guesses about who will buy a service contract and work hard to make sure that every customer is presented with every option every time.
“When we sell cars we are not simply closing another deal, but building a business relationship with our customers. As such, we need to protect them from the inevitable failures that occur with every vehicle. This thought is what really got me excited as we began to sell more service contracts. Not only were we instantly more profitable, but we were insulated from many of the headaches that come along with selling used cars. Our business may change on a month-to-month basis, but I have done this long enough to know that one thing remains constant – cars break and our customers like us a lot more when the repair is covered.
“At John’s Great Cars, we have dedicated two people on our sales staff to handle our F+I and now our sales staff turns over every customer for a separate presentation on the options available to protect their new vehicle. We have been very successful with this process, but even if you have only one or two people at your building, there are ways to ensure that every customer is given a proper opportunity to buy. You wouldn’t let a customer walk away who might buy a car, and you shouldn’t let one get away who might buy a service contract. The money is just too easy!”
John’s Great Cars was founded by John Bowers in 1991 in Reading, PA. Today he and his sons Mike and Dan are partners in the business, which is rated A+ by the Better Business Bureau. The dealership has offered Preferred Warranties extended service contracts since 1998.
Preferred Warranties Inc. has been a quality leader in aftermarket vehicle protection plans since the company was founded in 1992. In 1998, it was ranked #179 on the Inc. 500 list of fastest growing U.S. companies and earned a Torch Award for Marketplace Ethics from the Better Business Bureau, which continues to give the company an A rating. Preferred Warranties plans are available through dealerships in 17 states: Alabama, Delaware, Georgia, Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia. More consumer and dealership information is available on their website, http://www.warrantys.com.