Why Customers Decline Service Contracts, and the Phone Analogy That Changes the Conversation

Customers usually decline a vehicle service contract because of a past experience, not because they have no use for protection. In this Training Camp episode, Adam Marburger explains how he changes that conversation: start with a question, let the customer explain their reason, then use an analogy they already live with every day, their phone.

What retail customers actually want

Adam describes three things every buyer wants from a vehicle purchase:

The greatest use and enjoyment of the vehicle.
The lowest total cost of ownership.
The least amount of aggravation.

They also want a frictionless buying experience and a protected budget. And, as Adam puts it, they do not want to be sold anything, but they do want to purchase. A service contract speaks to all three wants: the customer keeps their budget intact and keeps a vehicle to drive if something breaks.

Start with a question, not a word track

Instead of “fancy word tracks” and payment manipulation, Adam asks: “You were quick to decline the coverage. Why is it that you prefer to be unprotected?” That lets the customer say their reason out loud. You can set it aside, then have a real conversation. (We cover this question in detail in how to handle F&I customer objections.)

The homeowners insurance question

When a customer says they simply don’t need it, Adam sometimes asks whether they were upset last night when they pulled into the driveway and their house was not on fire. The question sounds odd, which is the point. Of course they weren’t upset. They have homeowners insurance anyway, because something catastrophic could happen, even though the chance of a claim is slim.

The phone analogy

Almost every customer carries a smartphone, and most protect it. Adam walks through it with them:

Why do you have a case on it? In case you drop it.
Why the screen protector? In case it cracks or chips.
Why pay monthly for device protection? In case it is lost, dropped in water, or stops working.

Then the comparison: if you protect a phone that way, why not protect a vehicle that is, in Adam’s words, “an iPhone on wheels”? Today’s vehicles are computers on wheels, and customers already understand protecting expensive technology.

Slow down and make it relatable

Adam’s recap for F&I managers:

Slow down and listen more.
Use visual aids in the presentation.
Make the products relatable and easy to understand.
Tell a story the customer can connect with, instead of reciting a script.

Word tracks have a time and place, but the conversation has to fit the customer. For more on what top stores do with service contracts, read what high-profit dealers do differently with vehicle service contracts.

Training never stops

Adam closes every episode the same way: if nothing changes, nothing changes. Training is not something a store did once. It is something it must keep doing. See how Ascent approaches ongoing F&I training.

Adapted from Training Camp with Adam Marburger, first aired April 29, 2025. Watch this episode on CBT News or browse every Training Camp episode. Have a question about your F&I department? Talk to the Ascent team.