A bundle of new- and used-vehicle warranties with new licensed pre-owned packages helps Spitzer Automotive Group of Ohio, Pennsylvania and Florida get prospects within the door throughout a interval of low stock.
Final yr, the group launched its “Spitzer Protect,” a set of advantages that features a nationwide lifetime powertrain guarantee on new autos and a 7-year, 100,000-mile nationwide powertrain guarantee on autos purchased by its CPO program.
The group launched the Protect after it started to reevaluate its shops’ worth proposition to prospects of their markets, COO Andrew Spitzer mentioned. He mentioned the group discovered it wasn’t aggressive sufficient with different dealerships that have been providing 20-year, 200,000-mile warranties on new autos.
“I noticed that and mentioned, ‘All proper, I respect that. Now let’s beat it,'” mentioned Spitzer, a 2022 Automotive Information 40 Underneath 40 honoree.
“We have been in enterprise since 1904, however is that going to be the factor that makes an individual need to purchase a automobile from you? No. You need to be aggressive, at the start,” he mentioned.
“It is a copycat league in a approach,” he mentioned. “That feels good.”
Since introducing the Protect, Spitzer mentioned the group has seen new stock ranges flip at a sooner charge, although he famous it was robust to say what function low stock ranges industrywide performed in that. However as a result of the dealership group is seeking to enhance its model consciousness “as excessive as it may possibly,” it’s selling the brand new warranties as a headliner to attract prospects to the shop, Spitzer mentioned.
“That approach, as soon as we do have extra vehicles on the bottom, we’ll be prime of thoughts and folks will know what we’ve to supply,” he mentioned. “We’re viewing this as a long-term strategy.”
Opponents in a few of the group’s 23 markets have since launched lifetime warranties of their very own as a solution to match the Spitzer group’s choices, he mentioned.
Spitzer Protect took place because the group started to show extra of its focus to used autos amid the new-vehicle stock crunch. The group launched its personal licensed pre-owned program, which incorporates the 7-year guarantee, in addition to advantages together with a 3-day, 300-mile car change assure, free service inspections and a 172-point inspection earlier than a car is put up on the market.
Spitzer experiences that its used-vehicle gross sales rose 45 p.c from 2020 to 2021, in contrast with a 29 p.c soar in new-vehicle gross sales.
The group attributed a few of that success to the launch of the CPO program and its new administration and advertising and marketing emphasis on used-vehicle gross sales. Spitzer declined to disclose any gross sales figures.
“We have needed to do some soul-searching and actually get acquainted with the pre-owned aspect, and to the credit score of my staff, they’ve achieved an incredible job,” he mentioned. “They have been aggressive and have taken some dangers that they usually would not, and so they’ve realized loads.”
Not having a CPO program could be a deal breaker for lots of shoppers, Spitzer mentioned, so providing a program of its personal has helped the group’s salespeople attain out to extra prospects.
“I do know after I offered vehicles, I beloved promoting the licensed pre-owneds, and my solely actual grievance was that after I offered at my Kia retailer, I could not promote any CPO Fords or Chevys,” he mentioned. “Now that is not the case.”
The powertrain warranties Spitzer gives have additionally helped drive up the group’s F&I income. The group has offered extra seal coats for interiors and exteriors, pay as you go upkeep packages, and different merchandise and choices since introducing the warranties, in keeping with Spitzer.
“The shopper acknowledges the differentiator we’ve with a powerful guarantee,” he mentioned. “That helps them to get into that mindset of considering, ‘How do I defend this buy?'”