In February’s issue of Motor Trader, AutoProtect were asked to comment on their Special Feature: Warranties.
Nick Wake, Sales Director, has provided his response below:
How serious is the competition from online warranty providers and how can dealers counter it?
Every market provides the potential for market disrupters to gain a foothold and the warranty market is no different. Disrupters typically emerge because their offers are easy to access, transparent, cost effective and because it addresses a perceived flaw in the established market.
Online warranty offers typically address perceived shortfalls in the clarity and scope of traditional warranties head-on. It is for this very reason that we have worked hard with our dealers to ensure that the breadth and processes associated with a warranty are clear online and in the showroom. It is fair to say that this process has encouraged many more dealers to switch to a wholly more customer centric approach.
Is there an opportunity for franchised dealers to grow their extended warranty penetration on new cars, or should they concentrate on used cars?
The scope on new cars is often limited where an extended warranty exceeds the planned ownership cycle. Nevertheless, dealer sales personnel need to be alert to the opportunities that do exist and always ensure the customer is correctly informed about the warranty. Used cars and vans will typically offer greater opportunity to satisfy customer needs for long-term peace of mind.
Are dealers maximising on van warranty opportunities? If not, what should they be doing?
The market for van warranties is significant and helped by the reality that time off the road can equate to lost business for many SME business users. In our experience, business users, especially SMEs are well-disposed to extended warranties – dealers who do not offer an extended package are invariably missing out on both the income and more especially the lifetime value opportunity that is on offer. A minimum six-month warranty and the availability of an extension up to three years should form a part of every used van presentation.
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