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A Roundup of Combo Products


When it comes to the term “Combo Product”, while there are a wide range of products and philosophies around the strategy, there are a few things that seem to be universal.

First, is that a combo product isn’t simply bundling several products together on a menu. While that is one way to sell F&I products, the combo strategy involves one provider offering a bundle of their branded products, and for the sale of those products to happen on a single contract. Across the board, our respondents to this month’s roundup agreed that the benefits of having a single contract for a customer to sign – getting them in and out of the F&I office faster – leads to higher sales volumes and a higher profit on the items sold. They did note that, at times, it can backfire however. If a customer doesn’t see the value of even one product in a bundle, it can kill the sale of the entire contract. But for the most part, our industry experts agreed that this is a powerful sales strategy.

Second, what was interesting to note was that while there were some common products across the board – most providers we talked to started with a base of a vehicle service contract, and built their combo offering from there – the products that were offered did have some variety. Roadside assistance, dent and ding coverage and key replacement were three of the most cited products. Tire and wheel and appearance protection came in a close second, and most providers offered an average of three to four products in their combo packages.

One thing several providers mentioned is that they are always working with agents and dealers to bundle products together in new ways, but that state and federal regulations are something they keep a very close eye on. Key replacement, for example, is often in bundles today, but one provider noted that it’s possible that will be classified as an insurance product in some states in the future, which would disallow it from being included in combo packages.

If you are looking for insight into the exploded market for combo products, click on the companies below to hear their thoughts about the category, the pros and cons of selling combo packages, and where they see it evolving next.

Combo Product Roundup

American Guardian Warranty Services (AGWS)

American Guardian Warranty Services (AGWS)
Jon Anderson, SVP, Sales and Marketing

How do you define a “combo product”?

Combo appearance packages offer extreme value and represent the most relevant offering to a new vehicle or certified pre-owned customer. Customers love the appearance of new or certified pre-owned vehicle and they want to protect it. They give an F&I Manager the versatility to offer the appearance protection benefits most relatable to the customer.

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GSFS Group

GSFS Group
Alan Bond, VP, National Sales

How do you define a “combo product”?

To me, combo product means multiple products that have been combined into, in essence, one product or at least one form.

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Innovative Aftermarket Systems (IAS)

Innovative Aftermarket Systems (IAS)
Jeff Jagoe, SVP, Sales and Marketing

How do you define a “combo product”?

More of a concept than a product, IAS offers dealers the ability to bundle two or more IAS F&I products as a packaged deal on a single form with a single price. This completely customizable program, called Multi-Shield, utilizes a mix and match approach to meet dealership and customer needs and the perfect F&I price point.

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National Auto Care Corp. (NAC)

National Auto Care Corp. (NAC)
Curt Johnson, Senior Risk, Product & Compliance Manager

How do you define a “combo product”?

In our industry, when multiple programs are combined into one potentially easier-to-sell product it’s referred to as a “combo”. Typically, combos have a service agreement product base, with non-mechanically related vehicle services incorporated – like tire and wheel or paintless dent repair – to add value for the consumer and ensure F&I offers a fuller range of aftermarket products to each customer.

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National Automotive Experts (NAE)

National Automotive Experts (NAE)
Kelly Price, President

How do you define a “combo product”?

To me, it would be taking any combo of several offerings, and creating different opportunities based on needs of the dealer. We focus mainly on reinsurance for dealers, and we try to combine products that are good for reinsurance and high value to the customer.

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RoadVantage

RoadVantage
Randy Ross, SVP, Sales

How do you define a “combo product”?

Typically, a combo product, or a bundled product, includes three or more ancillary components offered together in a single, branded package.

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Safe-Guard Products International LLC

Safe-Guard Products International LLC
Dave Duncan, President

How do you define a “combo product”?

A combo product takes existing ancillary F&I products and packages the benefits into one product, sold on one form.

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Wise F&I

Wise F&I
Matthew Croak, President

How do you define a “combo product”?

A “combo product” typically includes coverage benefits of multiple ancillary products in a single contract. These multiple coverage benefits may be offered in several formats including bundled, à la carte or a combination of both. A dealer’s ability to offer a single contract with multiple coverage benefit options allows for a more personalized solution and enhanced value to the customer, as well as additional profit opportunities for the dealer.

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Innovative Aftermarket Systems (IAS)


Jeff Jagoe, SVP, Sales and Marketing

How do you define a “combo product”?
More of a concept than a product, IAS offers dealers the ability to bundle two or more IAS F&I products as a packaged deal on a single form with a single price. This completely customizable program, called Multi-Shield, utilizes a mix and match approach to meet dealership and customer needs and the perfect F&I price point.

What types of products are you including in your combo packages today? Why?
IAS sells programs that include any combination of the most popular F&I products available today including tire and wheel, dent repair, windshield repair and replacement, key replacement, rips tears burns, cosmetic wheel scratch repair and a number of other products that can be packaged to offer maximum protection at the best value.

Multi-Shield has practically limitless combinations because different dealers want the ability to offer a variety of customer benefits depending on the type of car being sold and clientele that is represented. For example, a high-line store with high performance wheels will sell more cosmetic wheel repair than a non high-line dealership with standard class wheels.

What are your top reasons behind offering combo products? What, if any, reasons would you have to not offer them?
Simply stated, Multi-Shield adds value for the consumer, making it not only a popular product, but one that is easy to sell. Just like within a vehicle service contract (VSC) that offers more engine component coverage, Multi-Shield offers more tangible consumer benefits. But unlike a VSC, Multi-Shield doesn’t have to compete with manufacturer’s warranties, making it easier to sell. Plus, the benefits cover every day losses, such as grocery store door dings, lost keys and potholes, making Multi-Shield like a mini service contract, covering everything the manufacturer does not.

Is the sales process for a combo product different than for an individual product? Can you give an example?
One of the most attractive sales benefits of Multi-Shield is that although the consumer is receiving multi benefits, it does not take up multiple boxes on the menu. Since Multi-Shield is one program with multiple benefits, it frees up real estate on the menu, making it appear less cluttered and easier for the consumer to follow.

Do you believe the combo product strategy will evolve in the future? What types of product combos do you anticipate in the next 2-5 years?
Multi-Shield continues to thrive because it provides such a real value that consumers are likely to buy. A service contract can cover how well your car has been built, but Multi-Shield will protect how well your car is treated.

In the future, we foresee TAP, our new Trade Assurance Plus program, which is like GAP for trades, becoming part of a combo package presentation with GAP. It fits into the combo program because they both share loss benefits with different triggers. It happens to be so much like GAP that you can package-sell the program, all the while maintaining separate forms for flexibility.

Is there anything else you would like to add?
Overall, combo programs are a great back up plan for F&I managers who aren’t selling VSCs because it offers coverage for all the reasons they didn’t buy a VSC. And for that reason alone, we feel combo programs will continue to grow and thrive in F&I.

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Key Replacement Roundup


Key replacement is a relatively new product in the F&I world, but one that has grown tremendously in the past few years. We talked to some of the providers who offer key replacement to get their take on the product, and where they see it going, and it was no surprise to see their responses – every company we spoke with is expecting huge growth for this category.

Technology essentially created a need for the product, our respondents noted, with the advent of keys and key fobs that do more than simply lock and unlock a car. It started in the luxury space, but all the providers we spoke to see a hard push into the more “entry level” side of the market. Those technologies are trickling down to every make and model of automobile, and that will drive the need for key replacement even further in the next few years.

One interesting trend that emerged, however, is that many of the providers have seen more success overall when bundling this product with other offerings, such as tire & wheel or appearance protection, rather than selling it as a stand-alone product. It seems to benefit from being part of a package – customers perceive a greater value when it’s one component of a bundle.

Below, you’ll find the responses from six providers who offer key replacement products. We hope you find it as interesting a read as we did!

Key Replacement Roundup

American Financial and Automotive Services Inc. (AFAS)

American Financial and Automotive Services Inc. (AFAS)
Demetrios Lahiri, Vice President of Sales

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?

For more than 35 years, the American Financial companies have assisted dealers in increasing sales and maximizing overall profits. At American Financial, our driving force is to enhance the professional image of our industry through exceptional customer service.

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Accelerated Service International (ASI)

Accelerated Service International (ASI)
Timothy Jacobson, Sales & Marketing Manager & Michael Moretz, Vice President of Sales, North America

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?

Accelerated Service International (ASI) has partnered with agents and their dealer clients for over a quarter of a century. ASI’s In-house automotive retail experts and field consultants utilize their years of industry experience to create unique and custom Dealer Service Plan offerings that fill the needs of dealers, agents and consumers.

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Automobile Protection Corporation (APCO)

Automobile Protection Corporation (APCO)
David Colville, Director of Training

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?

Automobile Protection Corp. (APCO) was established in 1984. From day one, our philosophy has been to provide leading edge benefits that enhance a consumer’s vehicle ownership experience. We strive every day to deliver world class service to our customers, dealers and agent representatives.

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IAS

IAS
Jeff Jagoe, Senior Vice President, Sales and Marketing

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?

Founded in 1984, IAS was created to provide practical aftermarket programs and high quality administration and claims. IAS introduced key replacement in the fall of 2007 after a productive trial period with select IAS agents.

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RoadVantage

RoadVantage
Randy Ross, Vice President of Sales

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?

RoadVantage was founded in May 2011 by F&I industry veterans focused on one goal: build a better automotive aftermarket ancillary product company, from the ground up. Starting with a clean slate enabled us to eliminate the legacy issues that can be troublesome with providers and set a new industry standard in the process.

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Safe-Guard Products International LLC

Safe-Guard Products International LLC
David Duncan, President

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?

Features such as electronic chips and remote controllers make today’s keys much more costly to replace. Keys are not a $20 item any more. Protecting consumers from the perils of vehicle ownership has always been Safe-Guard’s focus. We strive to provide protection, security and peace of mind whether a customer’s keys are lost, stolen, locked in a vehicle – or even broken.

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IAS


Jeff Jagoe, Senior Vice President, Sales and Marketing

Can you give me a bit of your company history? How did you become involved in the Key Replacement category?
Founded in 1984, IAS was created to provide practical aftermarket programs and high quality administration and claims. IAS introduced key replacement in the fall of 2007 after a productive trial period with select IAS agents.

What makes your product different from others on the market? How do you differentiate it?
The IAS ROAD Key Replacement program will replace lost, stolen or destroyed keys as well as include 24-hour emergency road service.

In 2011, IAS introduced the Key Valet program which protects customers against the expense of destroyed, stolen or lost keys. In addition to the standard benefits of our traditional key replacement program, IAS Key Valet provides consumers:

• 24-hour home lock-out assistance – Provides services to unlock your home and provide up to three key replacements.
• Emergency message relay – Provides assistance relaying an emergency message to up to three family members, friends or business associates.
• Driver valet – Get connected with a preferred rental car service and take delivery of your temporary vehicle.

Plus, the IAS key replacement is backed by the world-class IAS customer service and claims.

What is your primary sales channel? How do you market to that channel?
IAS works with several large dealer groups to customize and private label several of the most popular programs, including key replacement, but the primary sales channel is through a top-notch, nationwide team of general agents. The company markets programs like key replacement to general agents through one-on-one communication with sales staff, at industry conferences, in training events and IAS sponsored workshops.

How has technology impacted Key Replacement in the last year, if at all? Do you see it having an impact in the future? Why or why not?
Just like cassettes and VHS players before them, simple metal car keys are a thing of the past. Today’s automotive keys can do everything from locking and unlocking the car to remote-start the vehicles, causing them to create a category of their own known as the “smart key.” And just like smart phones, they are great to have and very costly to replace. And similar to smart phones that are protected by consumer-bought insurance, consumers are seeing the need for warranties to protect them should their keys be lost, stolen or destroyed. The impact of the very nature of the smart key has caused the program to gain great ground over the last year and we expect it to continue to grow as technology continues to play a part in key production.

In your opinion, where is the greatest growth potential for the Key Replacement category?
IAS has found great success with key replacement when it’s bundled in a multi-product package. It is often combined with door ding protection, windshield repair and replacement, and even tire and wheel. In addition to bundled packages, we are seeing movement in the service drive. A simple question of “where are your spare keys” can close the sale. Overall, the product is a win-win for dealerships and consumers.

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2013 F&Idol Contest Now Open for Entries


Torrance, Calif. — F&I and Showroom magazine and Innovative Aftermarket Systems (IAS) are now accepting video entries for the third annual F&Idol contest, a competition that seeks the best F&I sales performance in five product categories. The deadline to enter is Friday, July 26.

This year, there is a new “F&I Products for Lease Customers” category to reflect the resurgence of leasing, which accounted for a record 27.5 percent of all new vehicles financed in the first quarter, according to Experian Automotive. Other categories include Vehicle Service Contract, Tire and Wheel, Key Replacement and an open category. The latter allows participants to submit a video of them selling a product of their choosing.

“This isn’t just for bragging rights; the overall winner will walk away with $3,500 in cash,” said Gregory Arroyo, editorial director, F&I and Showroom, and one of the contest’s eight judges. “And all you need to enter is a smartphone with video-recording capabilities, great technique and a colleague to play the customer. It’s that easy.”

Participants are asked to submit a video of no more than five minutes that shows them working with a customer in a staged transaction. The videos, which can be recorded using an iPhone, Android phone, Webcam or any other video-recording device, must also show contestants handling at least two objections. Only one video may be submitted for each F&I product category.

A panel of eight judges will review each submission and award points for transition statement and overall flow; customer rapport and engagement; product disclosures; product knowledge; personal stories and testimonials; and objection handling.

Category winners will be announced in early August and are required to be in attendance at Industry Summit 2013, where they’ll be recognized during a special luncheon ceremony on Tuesday, Sept. 17, 2013. Category winners will receive $1,000 in cash, airfare and a two-night stay at the Paris Las Vegas Hotel. The overall winner will receive an additional $2,500 and will be featured in the November issue of F&I and Showroom.

To upload a video or to find contest rules, visit www.fandidol.com.

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A Roundup of Tire & Wheel Providers


One of the core products in the F&I portfolio is tire and wheel, but over the years, it has evolved to meet changing consumer demands. As the product has evolved, demand has increased — it’s a testament to how listening and adapting can keep a product category not only alive, but thriving.

“Tire and wheel road-hazard protection has become one of the fastest-growing products provided in the F&I office,” said Rick McCormick, national account development manager, Reahard & Associates Inc., in his recent article on the product category. “While there are a few isolated areas of the country that have endured high increases in the cost of this product, for most it is a great profit opportunity for the dealer, and a great value for the customer. That’s a recipe for success.”

To that end, P&A Magazine asked a few tire and wheel providers to tell us about their products, and what sets them apart. You can view their answers below, but one thing I found interesting was that they see growth potential for the category specifically in the cosmetic packages.

Offering to repair or replace tires or wheels that are simply scuffed or scratched, but are still structurally sound, is a market that is growing as more and more U.S. customers purchase upgraded tire or wheel packages on their vehicles. It is a great example of how a traditional F&I product has grown and adapted to the changing consumer preferences, without losing it’s core focus in the process.

Another interesting thing to note is that, from a general technology perspective, the companies we talked to saw the impact more on the claims side than on the products themselves. A faster claims process that is also simpler for both dealers and consumers to access and use, they note, benefits the entire tire and wheel category as a whole, as it leads to more repeat customers looking to purchase the product on additional vehicles.

If you don’t already offer tire and wheel as part of your product roundup, it is worth another look; these offerings are a good place to start your research. “It provides needed coverage at a value-based price to the customer, and is providing good profit levels for dealers,” said McCormick. “Bottom line, it is a great product that is a strong performer and is still growing stronger everyday.”

Tire & Wheel Roundup

CNA National

CNA National
Alan Miller, senior vice president of sales

Can you give me a bit of your company history? How did you become involved in the Tire & Wheel category?

CNA National has been in the vehicle service contract industry for over three decades, so developing a tire and wheel product was a natural progression. We had significant demand from dealers because they already were highly satisfied with our vehicle service contract coverage and service levels.

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Family First Dealer Services

Family First Dealer Services
Zack Matta, director of product & business development

Can you give me a bit of your company history? How did you become involved in the Tire & Wheel category?

Family First Dealer Services (FFDS) was established more than two years ago by its founders Tony Wanderon and Courtney Criado. We provide and administrate many of the F&I products sold in dealerships today.

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Innovative Aftermarket Systems (IAS)

Innovative Aftermarket Systems (IAS)
Jeff Jagoe, senior vice president of sales and marketing

Can you give me a bit of your company history? How did you become involved in the Tire & Wheel category?

Founded in 1984, IAS was created to provide practical aftermarket programs and high quality administration and claims. IAS helped define tire andwheel as an aftermarket product offering in 1998 because we anticipated the need and found the program to be such a relatable and tangible product that is easy to market. We saw explosive growth in our tire and wheel program about a decade ago, during the wide spread adoption of menu selling.

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Safe-Guard Products International

Safe-Guard Products International
Dave Duncan, president

Can you give me a bit of your company history? How did you become involved in the Tire & Wheel category?

When Safe-Guard was founded in 1992, the industry was moving away from only offering vehicle service contracts and credit insurance in the F&I office. As companies looked to grow and develop their product offerings, one of our dealer group partners did some customer research, asking, “what should be covered under a manufacturer’s warranty, but is not?”

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