...Idea time: HOW TO SELL SERVICE CONTRACTS BY MAIL

Each month, letters are sent to our service customers whose manufacturers' warranties are due to expire. We also send letters to customers who were at time of deliver 'no-sales' of extended service coverage. (They would have signed a waiver which goes in the deal jackets and in their service files). In service, dates and mileage are pulled from service files of vehicles without extended coverage.

The letter takes a very soft sell approach and points out the key benefits of coverage, the high cost of repairs, and a no-interest payment plan. Our finance managers don't make marketing calls, they simply field inquiries, present coverage options, pricing and payment plans.

Approximately 50 letters are mailed each month resulting in about 14 customers inquiries and seven new service contracts on average.

If you figure the average gross on these service contracts per month, there is a pretty substantial additional service contract income per year. Given the size of your used-vehicle department and service lanes, you have the opportunity to have the additional gross you are looking for.

It's low cost, it's easy, it's effective.

Idea Time is a feature of NCM Associates, Inc., using ideas provided by dealers participating in 20 Groups.