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“My Insurance Company Has GAP”

Posted Dec 9th, 2015 in General

“My Insurance Company Has GAP”

Another great article by George Angus! 

F&I Professionals are hearing that more and more lately. The customer declines GAP coverage because their insurance carrier offers it at a lower price.

Working with our F&I Masters™ group, we have developed an easy, simple way of handling that objection that is proving to be surprisingly effective.

But before I share that technique with you, I’d like to put the issue into some perspective.

First, can we win the argument?

You may have heard all the arguments you can make to the customer to “overcome” the objection, i.e., the insurance company will decide to fix their car rather than total it if they hold the GAP policy, they must still pay a deductible, it counts as a claim against their insurance and can raise rates, they lose GAP coverage if they switch insurers, etc., etc.

However, many F&I professionals find that those “arguments” tend to fall on deaf ears. There’s a reason for that.

The Credibility Gap (no pun intended)

Apparently, insurance companies have figured out people don’t trust them. Look at the way they advertise. One insurance company runs ads about how they are different because they offer policies (for some gal who named her car “Brad”) and will actually pay replacement value for totaled vehicles. “How does my new car depreciate before its’ first oil change?” one guy asks.

And of course, the company running the ads says they are different because those other companies don’t promise such coverage. The implied message is “You can trust us, not those other guys”.

Can we take advantage of people’s skepticism about their insurance company?

Well maybe, but the problem we have is that while people may have some trust issues with their insurance company, they trust car dealers even less. And getting into a credibility war with their insurance company might backfire.

It reminds me of the credit union conversions we were taught in the old days. We were given all kinds of ammunition to defeat the credit union, i.e., chattel mortgages, right of offset, cross collateralization, (is that even a word?), they don’t always report to the bureau, your fellow employees know your personal business, etc., etc.

But when we told customers all the reasons they should not go to the credit union, what would they do?

Go to the credit union.

This can happen when we take a confrontational approach with the customers’ insurance company regarding GAP. Of course the “objection killers” above are all true, and winning the argument may feed our ego, but it can make the customer uncomfortable and put them on the defensive. Certainly, this approach has proven to be marginally effective, at best, in “real” F&I offices.

A while back, I was in a dealership watching one of our top performers doing a presentation when this objection came up. The customer said “Our insurance company already has GAP”.

This very experienced F&I Professional got a puzzled look on her face and said quite innocently, “I’m sorry, I’m not sure what you mean”, like she had never heard of that before.

“I want to be sure I understand. Your insurance company wants to sell you a policy to cover what their policy doesn’t cover?” she asked.

The customer looked a little taken aback and said, “Well yeah, I guess when you put it that way, it doesn’t make a lot of sense”.

Then the F&I pro said “Well I’m not sure what they do but here’s what I can assure you of. This policy goes right on your finance contract, so you can be sure that the balance, and your insurance company’s deductible, will be paid and you will have no more commitment to that loan. Then you can just come in and replace your car”.

The customer said “Well, how much is it again?” The F&I pro said” About $12 per month”.

“So with that, our payment would be what?”

And they took the GAP, as well as the rest of the Preferred Package.

No hassle, no resistance, no loss of credibility.

After the customer left, I asked the F&I pro if she had actually never heard of insurance companies selling GAP.

She replied “Of course, all the time, but I don’t argue with them. If it doesn’t make sense to me, it usually doesn’t to them”.

After sharing this technique with a group of our F&I Masters™, the results over the last year or so have been very encouraging.

Now, you might think you should appear more knowledgeable about their insurance coverage and give them the benefit of your expertise. You know, let them know you are an expert at this stuff.

I get that.

But give this approach a try. It works, and takes all of 30 seconds to do. And you don’t lose your credibility or alienate the customer.

Of course, you'll have to practice making the face.

Try it and let me know your results!


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