The appeal of F&I products like warranties and gap insurance is in protection from the unforeseen. It's sort of like a bet that if something goes wrong, the car owner won't have to fork over direct cash to fix the situation. This can be appealing to those who do not like big expenses hitting them when they least expect it, but what about those who can afford any expense that a car might generate? The affluent customer has a hard time seeing the value in paying for something that will only benefit them if bad things happen.
In an article on FI Magazine, Ronald Rearhard breaks down the situation and comes up with a solution to selling products to affluent customers.
Jon, affluent customers don’t live paycheck to paycheck, so they can easily pay for that unexpected repair if and when it occurs. Hey, money may not buy happiness, but it definitely makes life easier. When you have plenty of money, you don’t have to worry about how you’re going to pay your bills this month, or pay for unexpected car repairs or a deficiency balance if your car is totaled.
Read more on FI Magazine.