Just curious, with vehicle prices/affordability being what they and auto loan delinquencies being up, has anyone noticed an uptick in warranty/F&I cancellations at all?
F&I Cancellations?
- Thread starter Zack_AF
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We have. I don't have any concrete numbers so it's all anecdotal but it seems we're cancelling product at least once a day vs once a week a couple years ago. For reference, we're selling 525(ish)/month and it's almost all subprime or cash.
I don't understand the cancellations due to household budgets.
When VSC or GAP cancels, the monthly payment doesn't change. Or all of these people trading and that is the reason for the cancellation?
When VSC or GAP cancels, the monthly payment doesn't change. Or all of these people trading and that is the reason for the cancellation?
- Dec 19, 2018
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I think that comes down to how good the F&I person is. To me, it comes down to how good they are at explaining this and not being defensive or pissy that the guest is trying to cancel.
100%. Or in some cases, likely overselling something the customer didn't want in the first place, giving them an 'out to cancel' if they don't want it.
@Zack_AF mentioned auto delinquencies being up, so those cancellations would be on behalf of the lender canceling if they got their car back. Most sub prime customers need GAP, so that would make the most sense.
Oh it could be anything. Repos, people selling/trading in for cheaper/less car, etc. Whatever they can do to either shed expense or get a few dollars back in their pocket if possible. I was just curious what dealers were experiencing and if there was any noticeable changes or not in the current market as this is something that never gets brought up.
Ours has been roughly the same. Like @Tallcool1 said though, if the customer financed the purchase originally, it won't get them any money back or lower their payment, since it goes back to the lender.
Correct. I should've expanded further as I know it's not the case the customer always receives money back or that it lowers their payment. I'd attribute the scenarios with financed products being canceled likely be a lender getting involved due to a repo, total loss, etc.
Small sample size here but appreciate you guys chiming in as well as anyone else that's willing to share any insight!
