Finance Manager 101: Selling Rust Proofing and Stuff Like That!

The unfortunate thing about rust proofing and other environmental products sold in a car dealership, is that most consumers feel they are a huge rip off, which is really too bad, because at the same time those products could be the best value you offer in your business office. I'm going to tell you how the car industry has ruined the reputation of these products, and maybe how you can help fix that.

First of all. Let's face it. There is a growing stigma around aftermarket products sold by car dealerships in the business office. Extended warranties that don't cover anything and rust proofing and environmental products that are overpriced and a waste of money. And guess what...car dealers have done it to themselves. How? Well, first by selling extended warranties that well...don't cover anything, which we’ll get to in another video, and secondly by overcharging and undervaluing environmental protection packages for vehicles.

There is a growing stigma around aftermarket products sold by car dealerships in the business office.

Sometimes car dealerships are their own worst enemies, and there is no better example than environmental products sold in the business office. For what the products actually cost, and what they actually provide in the way of value and return on investment, these products might be the best value a dealership can offer a client but, half the time they screw it up, and they screw it up in multiple ways.

Many car dealerships simply overcharge for the products. They take products that cost a few hundred dollars and they charge thousands. I've seen dealerships charge as much as $2500 for a rust package. Twenty-five hundred dollars. It's no wonder a huge percentage of the public thinks it's a rip-off, because it is! It’s a rip-off! Dealers often justify the huge cost to the customer by setting unrealistic expectations for the warranty that comes with it. I've been in the business 30 years and you know how many times I've seen a third-party warranty cover rust on a vehicle. I would say none, but you wouldn't believe me, so let's say a handful of times.

It's so bad, even many of the people working in the business think it's a waste of money. A scam. I remember being a salesperson at a Ford Store in my early twenties and selling a used car. We’d get like a little small bonus if the customer bought a rust package in the business office. I think it was like $20 for rust, $10 for paint, $10 for fabric, and maybe $50 if they bought all three. I used to promote the hell out of it. I loved it! Then one day I sold a used Ford Bronco and was checking in on it to make sure it was ready for delivery. I looked at it and could tell that the fabric protection wasn't done. No smell of the protector. Even some dirt on the seats. The delivery is in less than half an hour so I'm in a bit of a panic. I run to the detailer and tell him. He doesn't care. He laughs at me. I run to the used car manager. Now I'm young, a little excitable. I express my concern that this fabric protection we sold hasn't been applied, and the delivery is in twenty minutes! He says, "Don't worry about it, just tell them we did it."

"What? I can't do that! They paid for it! They should get it!" He looks at me, drops a few F-bombs, and is, like "Ok" and storms off to the wash bay with me behind. He grabs a bottle of something, I'm guessing it was fabric protection, literally opens the front passenger door, sprays three times into the vehicle waving his hand wildly, slams the door and says, "There! Happy?" and storms off.

That's what many people who work in the car business think about environmental protection products- that they’re not worth anything. A complete scam. And that's the people in the business. No wonder the public has the same thoughts. But you know what? They couldn't be more wrong. You just spent tens of thousands of dollars on a new, or nearly new to you, vehicle. Wouldn't you want to protect it? Make it last a little longer? Maybe not rust for a little longer? Wouldn't it be nice if the paint or the leather, or the fabric didn't fade quite so soon? Wouldn't you pay a little more for a used vehicle that had been rust proofed or protected by the previous owner? How about the environment? It's certainly top of mind these days. If you could keep vehicles out of the junkyard a little bit longer, wouldn't you want to do that?

The problem starts when you overcharge for the product and then justify the price by focusing on a warranty that has a ton of limitations.

Here's the thing, this is pretty obvious stuff, right? Steel Rusts. Paint fades. Fabric can get stained when you spill crap on your seats. It isn't brain surgery. You coat the vehicle with rust protection, it rusts slower. You coat your paint with paint protectant, it fades slower. People even get the whole fabric protector thing. Coat the fabric with a fabric guard, liquid can't penetrate, thus no stains. The problem starts when you overcharge for the product and then justify the price by focusing on a warranty that has a ton of limitations. The customer hears "this is a lifetime warranty against rust" or, "ten years of protection for your paint and fabric," when the reality is there are a ton of exclusions or limitations. Who among you is reading the four pages of limitations written in microscopic type? Exactly! Limitations like, "rust must come from the inside". Rust almost never comes from the inside. Or maybe they need annual inspections or re-applications that cost money and when not completed, void the warranty. Whatever the reality is in your store, I've been in the business three decades and I can count on one hand the number of times I've seen a warranty claim actually pay out for rust, or faded paint on a vehicle. That's just the truth.

And you know what...The best way to sell anything is with the truth. The truth is that it works. The truth is it has value. It enhances the ownership experience. It extends the life of the vehicle. It protects the vehicle from the environment while protecting the environment at the same time. It adds value to the vehicle when you sell it or trade it. If you sell it for the right price, unlike the vehicle itself, it's the one product that they can buy that will be an equal or higher return on investment when they trade or sell the vehicle if you sell it for a fair price!

If you own a car dealership or you work in the business office, do yourself and your customer a favor and sell these products at a reasonable price, and then spend more time explaining the actual value of the products which really isn't the "warranty" that comes with the product. The value is in enhancing the ownership experience, protecting the customer's investment, and best of all in a small way, protecting the environment as well. In the end, you’ll sell a ton more and have a much happier client. Good luck and good selling.