Is your dealership sales and F&I staff ready to sell electric vehicles (EVs)? Product knowledge is one thing, but helping a car shopper through the purchase experience is quite another. As EVs become more available, many consumers will be excited to buy one, only to discover after the fact that the vehicle does not suit their needs.
Part of EV readiness is educating your staff so that they can educate the consumer. Here are a few things to consider.
Needs Analysis for EVs
First, it’s important to discover why a customer wants to buy an EV. There is a common perception that all EV buyers are concerned about the environment or want to save money on gas. But these may not always be primary motivators for some EV buyers. Some people are interested in the technology or believe that owning an EV is “cool.” Others might be interested in the performance aspects of the vehicle. The first line of questioning should be to discover a shopper’s why, so you can sell into that need.
With EVs, driving habits will be a critical part of the needs analysis. EV batteries take hours to re-charge, so if a person is constantly on the go or sharing a vehicle with another family member, a hybrid may be the most practical option. The same goes if a person travels for business or takes a lot of road trips. Do they really want to plan their vacations around the location of charging stations?
Cost and Benefit Analysis
Most consumers assume that owning an EV will save a lot of money in fuel and maintenance costs. While that is true to a certain extent, EV prices come at a premium, and the long-term cost of ownership should be factored into the equation. Your staff should know how to help a car shopper accurately assess their long-term potential savings, if any.
A cost/benefit analysis might include:
- Higher initial cost of EV versus a similar gas-powered model
- Annual savings in fuel costs, based on miles driven
- Annual savings from eliminating routine maintenance such as oil changes
- Cost of at-home charging station, plus installation, if warranted
- Higher cost of electricity from charging, whether at home and/or on public charging stations, based on miles driven and local electricity rates
- Higher cost of auto insurance: On average, insurance for EVs is 23% more expensive than the cost for an equivalent combustion vehicle, according to Value Penguin.
- Higher repair costs due to technician expertise and the fact that parts are more likely to be replaced than repaired
- Cost of F&I products that offer long-term protection against the high cost of repairs
- Tires need replacing more frequently than gas-powered vehicles, because EVs are heavier and cause more wear and tear
Many EV buyers believe that since they won’t need oil changes and EVs have fewer moving parts, they won’t need a vehicle service contract (VSC). However, it’s important to know that 75% of VSC claims are on items that exist on EVs, such as brakes, electronics, and air conditioning.
Plus, EVs are loaded with complex components that have hefty price tags if they need repair, such as drive motors, batteries, transaxles, auxiliary heaters, and water pumps.
Consumers are used to buying extended warranties on products like computers and cell phones, yet these products do not have any moving parts. An EV is basically just a large computer on wheels, so train employees how to sell VSCs the same way that Apple employees sell AppleCare+ to their customers.
Training your staff to do both needs and cost analyses will help to set car shoppers’ expectations and ensure a satisfactory purchase experience. Educating EV buyers about the benefits of a service contract will help your customers to protect their long-term investment and pave the way for long-term customer loyalty.
Scot Eisenfelder is CEO of APCO Holdings LLC.