In January, AutoPayPlus announced the launch of RePayPlus, an industry-first reinsured biweekly payment program that was developed in partnership with Reinsurance Associates.

Agents and dealers face numerous headwinds amid a weak spring selling season. Attorney and AutoPayPlus founder and CEO Robert Steenbergh says adding a payment management program can quickly move the F&I needle for the approximately 80% of dealerships that don’t have one.

DAN: Bobby, how does payment management help agents and dealers right now?

Steenbergh: When the average price of a car is $50,000, the average term is 72 months, and interest rates are up, you’re going longer and longer on the term just to get to a payment your customer can somewhat afford.

The vast majority of the country gets paid either weekly or biweekly. And 60% of them live paycheck to paycheck. You have to offer a structure that fits the way they think about their money and the way they budget and live their lives from a cashflow basis. That’s the reality agents and dealers are going to have to come to terms with.

DAN: How does adding a payment program change the F&I process?

Steenbergh: The way I prefer — and the way our most successful dealers do it — is to start at the desk. Ask the customer how they get paid. Tell them, “We have a program you will learn more about later. We can structure it to your pay cycle to make it more affordable for you and easier to budget.” When they get in the F&I office, the customer usually brings it up.

If it starts in the F&I office, it’s presented toward the end of the transaction. They’ve gone through all the other products and they’ve selected what they wanted to select. The price is naturally now bumped up a little bit. They can say, “I know that looks a little steep, but we have a repayment program here. Let me show you the benefits of it.”

And one benefit is that, on an 84-month term, you’re going to pay it off eight or nine months ahead of time. You’re going to accelerate the equity in the vehicle. When you want to come back and trade it in, you’ll be in a much, much better position as far as the negative equity goes.

DAN: GAP came along just as credit life and disability started to decline. It filled that need to protect customers from personal financial disaster. What’s it going to take to get payment management where GAP is now?

Steenbergh: Market conditions drove GAP adoption. Prices were rising and there was a need. But it didn’t become a core product overnight. It took some time and some momentum to grow. But banks were really pushing it. So that led to a more rapid adoption than we’re going to get with RePayPlus.

But we’ve signed up probably the biggest agents in the country. They’re working with their dealers to present it as a core offering. And not only will it help customers, just by using it — based on statistics from our dealer integrations — you will sell 27% more service contracts. So not only does RePayPlus feed its own reinsurance stream — which pays a high premium, second only to the service contract — you’ve got an extra 27% going into your VSC reinsurance as well.

We’ve been doing this for 24 years now. We’re big enough to handle being a core product for the vast majority of dealers, just like the GAP companies are.

DAN: And couldn’t you argue that, for an agent, it’s a door opener and a conversation starter? If 80% of dealers don’t have payment management, it must be.

Steenbergh: Exactly. One of our best agents is just now putting on a 40-rooftop group, and this is the only product they have in there. It’s a unique offering to the vast majority of dealers. So you can walk in and have a conversation without having to worry about fighting with the other VSC agent.

Tariq Kamal is the publisher of Dealer Agent News, Auto Dealer News and AI Dealer News.