Eliminating the Exclusion Headache

When a vehicle service contract is sold and the dealership customer walks out the door, in theory everyone is happy. The customer has peace of mind knowing that if problems strike, they will be covered, and the F&I manager has the satisfaction of knowing they have helped a customer better plan for the road ahead.

That’s the way it’s supposed to work.

In reality, all too often customers suddenly find they aren’t as covered as they thought they were, due to contractual exclusions. The result: Customers end up facing unexpected expenses, which they blame on the dealership and the F&I manager, falsely believing they were lied to or taken advantage of. Unfortunately, this means they are unlikely to be this dealer’s customer again.

Most F&I product contracts contain complicated language describing what is — and what is not — covered. Take Tire & Wheel programs, for example. The F&I manager most likely doesn’t know what type of wheels are on the vehicle the customer just purchased, and assumes — rightly so — that the customer will be covered by the contract. But many contracts specifically exclude alloy, chrome, chrome clad, aftermarket wheels, hubcaps and even snow tires; meaning these things aren’t covered, which leaves the consumer who has just purchased a vehicle with these types of wheels out in the cold.

Other common areas where exclusions can cause headaches are situations such as damage caused by curbs, damage caused in car washes, or damage occurring in parking lots or construction zones. Customers end up with damage that they assumed was covered, but instead, are responsible for the entire cost of repairs when they purchased an F&I contract specifically to ensure that didn’t happen.

All of this leads to angry customers generating heat in the dealership’s service drive, which then leads to a loss of business that can cut deep when those customers tell their friends and family members – and maybe even social media networks – that they were ripped off.

It doesn’t have to be this way.

Angering the customer with tons of exclusions is not the way to do business. If a customer buys a contract to cover a specific part against damage, then that’s what they should get. It shouldn’t matter what type of wheel is on the car, or if the damage occurred in a car wash or construction zone. And that is the philosophy behind the Preferred Plus family of RoadVantage products, which are built on our True Coverage initiative to simplify contracts and eliminate exclusions. We know that happy and satisfied customers, in the long run, lead to more sales, referrals and repeat business than the small amount of savings that comes from denying claims.

Eliminating headaches for customers, dealers and agents is how we build consumer confidence in F&I. And that is how we, as an industry, not only survive in the coming years, but thrive.