Ancillary products like GAP, service contracts, and tire and wheel coverage are critical elements of the powersports finance process. But confusing underwriting parameters and tricky compliance regulations may spur dealers to request some hand-holding from their providers. Powersports Finance asked lender and vendor executives for some strategies to streamline the process for ancillary product sales. Here are their tips:
Make Onsite Visits
With terms and conditions that might be confusing to consumers — or even to dealers — ancillary product should make a point of visiting their dealers to provide guidance. For instance, a dealer might be having a tough time explaining the product to the customer, or he might not understand the product well enough himself, said Glenice Wilder, vice president of powersports at EFG Companies.
“Our account executives get out to the store and meet with the general manager,” Wilder said. “It’s to identify, ‘Here are the things that I would like to go over, Mr. Dealer. Is there anything that you would like for us to handle while we are in that store?'”
Specifically, EFG sales reps visit dealerships once or twice a month to give in-person training. They meet with the general manager, the sales manager, and the F&I manager to address issues. For example, the rep might show the dealer how EFG’s technology, called MenuSys, works, or point out functionality the dealer may not be using.
Aim for Simplicity
Ancillary products can be complicated, so lenders have to figure out ways to simplify them. For American Cycle Finance, that means relying on vendor RPMOne to offer extended warranties, service contracts, and tire and wheel coverage. Those products are “pretty basic to understand,” so the dealer is already familiar enough to explain and sell them to the customer, President Ben Donnarumma said.
“We could have created our own white-label [product], but we wanted to have the recognition that the dealers already had with [vendors],” Donnarumma said. “It’s seamless for [the dealer], rather than having to learn something new.”
Donnarumma suggests choosing a vendor that dealers might be using with other lenders.
Alternatively, ThunderRoad Financial takes a different approach for easing the process for dealers. The Reno, Nev.-based lender has developed an option for dealers too small to sign with third-party providers. The lender created Thunder Guard, which consists of extended service contracts, prepaid maintenance, and wheel and tire coverage, said Chief Executive and President Donal Hummer Jr.
Since Thunder Guard was developed in-house, it integrates with ThunderRoad’s dealer portal. “It makes it easier in that once they put the information into our system, it can automatically prepopulate all the information for the extended service products,” Hummer said. “They don’t have to type it in again or go to a separate form or database or website for, say, an insurance carrier to do this. They put it in once, and it’s done.”
Compliance has slipped through the cracks at some dealerships, especially when it comes to ancillary products, said EFG’s Wilder. As such, lenders and service contract providers should tackle compliance training in monthly visits. A good place to start: ensuring that paperwork is properly completed.
Powersports dealerships aren’t as aware of some of these compliance issues because regulators have largely overlooked the powersports space, Wilder said. However, that can provide an opportunity to make sure everything is “buttoned up,” she added.
“It’s surprising that when you walk into a dealership and see, let’s say, a customer’s folder sitting on the F&I desk, and the door is open,” Wilder explained. “If someone from a federal agency were to walk in and see that sitting there, it’s a $16,000 fine per page that’s in that folder. In the powersports space, they don’t know that.”Like This Article