Uninformed Risk Acceptance and Self-Insurance
So you’ve conducted your menu presentation to a cash buyer who responds, “No thanks, I’ll self-insure.” You accept this as a typical response and conclude the paperwork. “Folks, if you will, please sign right here where it states, “Customers FORFEIT all options.”
The customer has probably just made an ill–informed decision…that to self-insure without a true understanding of the level of risk acceptance they are taking upon themselves. Remembering that, “results have shown, that our HAPPIEST customers are those who don’t have to pay for ANY of their repairs, for ALL covered PARTS and LABOR, less their deductible of course!!!”…a little more consideration is in order.
After all, has this scenario ever occurred at your store? The salesperson from whom you received a cash deal, 2 hours earlier (for the customer from 6 hours away), frantically turns up in your office. “Please tell me Mr. and Mrs. Wright purchased a service contract”, he implores. You respond, “Nope, they declined. Why?” He replies, “Because they’re a hundred miles away, the check-engine light just came on, and the car is smoking.” Unfortunately, this, as we have all seen, happens with regularity. Today’s vehicles are vastly complex things, and they fail. Instead of responding, “I told them so”, perhaps we could take the high road and approach the need a little more thoroughly.
To the “No thanks, I’ll self-insure” response, we could consider the following reply…”Mary, Mike, you have full coverage insurance on the outside of your new car. If you’re like me, you probably won’t make a claim unless it’s pretty sizable because you don’t want your rates to go up and you certainly don’t want to be cancelled. We both have a $500 deductible” (if applicable). “I’m sure we both have good driving records and, if you’re like me, pay
about $1000 per year for the insurance. For thousands of dollars less than that investment, over the same term of coverage” (if applicable), “the full- mechanical VSC pays for the parts and labor to repair over 5000 items on the typical vehicle. Almost everything is covered, other than your wearable maintenance items; things like your oil changes. You can make as many claims as you need without your rates going up or risk of being cancelled (subject a stop loss clause). The deductible is $400 less” ($100 deductible). “You only pay one deductible, per visit, not per broken item fixed. Think about it…I’m sure you passed 10 times as many repair shops, on your way here today, versus body shops. Are you sure you want to assume ALL the risk that comes with self–insuring the thousands of parts on the inside of your new car and FORFEIT the benefit?”
Give it a try.
Good luck and good selling!