CARMEL, Ind. — AutoTech Protect, the first true technology-focused service contract in the F&I industry, has officially been released. It is designed to cover the potentially highly expensive technology components that today’s vehicles are often equipped with, such as touch screens, GPS/Navigation systems, Bluetooth components, and interactive radio systems such as Apple CarPlay® and Android Auto® (for a full list of coverage, please visit autotechprotect.com).
AutoTech Protect is designed as an option for dealerships to offer to consumers who won’t purchase an exclusionary (“bumper-to-bumper”) service contract, typically because of price or payment constraints. Because AutoTech Protect doesn’t cover items such as the engine and transmission, it can be offered at half the retail price of the lead exclusionary plan, yet dealerships can maintain similar margins, while consumers receive modern technology coverage.
“We don’t envision this as being the primary service contract sold in the F&I office,” said Shawn McCool, Founder of AutoTech Protect. “It is designed to be offered after a customer has rejected the lead service contract offering, rather than compete with it. Therefore, if a consumer purchases AutoTech Protect, it is truly “found” revenue for the dealership, without overlap or cannibalization of their lead service contract plan. And, data from our 15 store pilot confirms this. The lead service contract provider’s volume was not affected. Yet, over 15% of the customers that declined the lead provider’s plan purchased AutoTech Protect, again resulting in “found” revenue for the dealership.”
AutoTech Protect is fully insured like most service contracts, and is available to both franchise as well as independent dealers. It is offered primarily through the agent model, and unlike some other F&I product providers, AutoTech Protect is being offered as a “protected territory” agent model — the company limits the number of agents who can market the product in a given geographic area. This approach is rather unique in this segment of the F&I product industry.
“This is a win-win-win for the consumers, dealers, and agents. AutoTech Protect provides our agents with another great product to market, and a potentially exclusively one, from their portfolio. And dealers now have a new opportunity to offer a cheaper alternative service contract to their customers that decided not to buy their lead exclusionary plan ,” said McCool. He continued,” It’s also great to have a product that helps overcome the ‘perceived quality’ issue, where consumers believe the vehicle they’re buying is so well-made, there is little chance of a mechanical breakdown. We focused on potentially expensive technology components to cover, and those are components consumers simply can’t maintain.”
AutoTech Protect is available for both new and used vehicles (up to 10 years old and 100,000 miles). Currently, the program is available in 47 states, with administration partner American Colonial Administration in Dublin, Ohio — a subsidiary of Innovative Aftermarket Systems (IAS) — and insurance partner Dealers Assurance Company (DAC), which is rated A- (excellent) by AM Best.
