Selling More GAP Starts with Equal Parts Preparation & Solid Questions

GAP insurance has forever been a tricky product to present to car buyers and even though PVR’s have been holding at record levels in the last year, this seems to be the one menu item that always takes a little extra coaxing to get a buyer to consider. 

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Like most ‘insurance’ products, you’re asking the buyer to look at the absolute worst-case scenario and who wants to do that when buying a new car? Not many of us.

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With the extra effort necessary to sell GAP, it’s important to look at the current process for qualifying a buyer for GAP prior to presenting it on the menu. Is your staff taking the time to really assess whether or not GAP is the right fit? What information can be examined ahead of time to better prepare for the qualifying questions necessary to close more policies?

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Here are the answers your staff needs before even broaching the subject of GAP insurance. Depending on the answers to these questions, it can help make the sales process much easier:

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1. How long are they looking to finance the vehicle? (financing short term may make GAP a bit unnecessary)

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2. Are they putting a substantial amount down or going with 100% financing? (the higher the amount financed, the bigger the potential shortfall if there is a loss)

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3. Are they rolling over negative equity from your trade-in? (adds even more to the financed amount)

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4. Are they buying a luxury or exotic car that may have a higher depreciation rate? (bigger price tag, bigger financial hit)

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5. Are they saying they will get GAP through their insurance provider? If so, ask if they will have a deductible. (many buyers may not realize what their insurer offers will differ from what your staff can offer for GAP)

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Once you have the prequalifying fact-finding out of the way, your staff can do a deep dive to gather not only specifics that directly correlate to the need for GAP but can make them better visualize the risk in NOT having GAP.

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F&I managers are trained to recognize the opportunities to recommend GAP coverage to buyers but it’s still important to have open-ended and thought-provoking questions ready to help illustrate the need to add GAP. And if nothing else, asking the right questions can help you snatch that sale back from online sources such as their car insurance company or their credit union (if financing that way):

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1. How Many Miles Do You Drive Yearly? GAP is designed to make sure the buyer is protected from having to pay the difference between their outstanding loan balance and the value at the time of theft or total loss. If your buyer drives over 20k miles on average per year, they are a perfect candidate for GAP. Miles that high add up and insurers have ways to verify that at the time of loss...the value will take a hit for sure.

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2. What is your down payment and/or trade? A high LTV on a car or truck that could take a big hit on appreciation in the first year will also be perfect for GAP. If the buyer is barely putting any down payment into the deal, their exposure if something goes wrong in the first 1-2 years is enormous. Their loan balance will still be high and it will likely be a large amount to have to bridge between that and the insurance payout. Walking them through the numbers here will illustrate the point best.

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3. Do You Have the Ability to Cover A Shortfall Now? Yes, it may seem like a rather intrusive question to ask because you’re asking if they have enough money to pay off a loan differential. It’s a valid question, though, and can be asked in an air of concern for the buyer...that you want to make sure that they don’t get blindsided if the worst happens. Approach this question with empathy and professionalism and it will always land well.

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GAP insurance is a tough sell for many car buyers and has been for years. As a product generally backed by insurance companies, some states don’t allow it to be sold at all for regulatory reasons that would be too much to get into here. But suffice it to say, GAP garners strong opinions among buyers.

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One more point…make sure that from a regulatory standpoint, your staff has got the GAP presentation on lock. Training is key for this delicate coverage and be sure that the T&C’s of your provider’s policies are committed to memory. 

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If sold properly, GAP can be a homerun, high margin add to most deals (especially with higher new cars prices).  Don’t shy away from asking as many questions as possible to help add to a healthier bottom line.

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If your dealership is thinking of a change in GAP providers or in administrators in general, give us a call here at truWarranty. Our truGAP product offers best-in-class claims adjudication, up to $125k coverage, $50k max benefit, goes out to 96 months in term, approved by all major lenders, and up to $1k deductible. It’s a GAP product built for dealers, by dealers. 

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And a special bonus…offer truGAP and have free access to truMenu, your all-in-one platform to be able to easily offer all products (even if they are through another administrator) in one interface. How’s that for simple? We think so. Let us know how we can help by reaching out here.

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