Over the years I have seen numerous service contract and product warranty programs competing for a share of the dealers’ F&I business.  I am frequently asked what I look at in evaluating a program and what items and/or issues a dealer should consider.  As always, a dealer should be realistic in looking at any individual product or program.  It is important to remember that since the dealership is the one selling a product to a consumer, no matter what the service contract or dealer agreement might say, the dealer can, under some circumstances, be exposed to liability. Read the rest of this entry →

The increased popularity of service contracts among consumers (as evidenced by the rising sales penetration rates in dealerships across the Country), combined with the recent problems related to the payment of claims by a service contract provider, has produced numerous inquires on the types of issues a motor vehicle dealer should consider when analyzing a service contract program.  As with any other product or service, a dealer should do some due diligence beforehand with respect to both the service contract provider and the product it is offering.   Remember, you must be realistic when looking at a particular service contract program.  As with dealership paperwork, the cheapest is not always the best.  Since the dealership is the one selling the product to the consumer it can be exposed to liability regardless of what the actual service contract or service contract provider’s dealer agreement might say. Read the rest of this entry →

While there are numerous sources of information for consumers on what to look for when purchasing a service contract and various laws to protect them, motor vehicle dealers looking for a service contract program are not as fortunate.   As I travel the country and meet with dealers at The Car Counselor’s TARP Conferences, service contracts and the types of issues a motor vehicle dealer should consider when analyzing a service contract program and its provider are a major topic of discussion.  Their concern is certainly understandable. Read the rest of this entry →