In May’s issue of Motor Trader, AutoProtecwasre asked to comment on their special focus warranties.
Nick Wake, Sales Director, has provided his response below:
In the current booming used car market with time at a premium can you give some advice on upselling extended warranties for sales staff and management?
We have been long time advocates for the role of extended warranties in the used car sector as a sales marketing and retention tool and as a profit centre in its own right. The key to benefitting from all opportunities is to view warranties as a core part of a business’ strategy. At the end of the day, dealers only have a limited number of tools available to them and the potential for warranties should not be ignored.
Three top tips:
- Review the sales and product knowledge of the warranties available
- Set a champion challenge amongst the team to improve sales
- Test the role of warranties in online marketing to differentiate the dealer offer
Can you point to new trends in the warranty sector that are impacting on dealers?
I think an interesting emerging trend will be customer feedback, notably online. We are seeing more customers engaging with review sites to share their experiences, making the sector more transparent and accountable. This is not just an issue for warranty providers but for dealers as well. It is very evident that customers want a quality product and a clear and accurate product explanation about coverage. This is guiding our dealer training and, we expect, the way dealers choose their warranty providers and promotional approach.
What impact has growing sales of used car PCPs had on the type of warranties sold?
Used car PCPs provide a definite, typically three-year window for the promotion of a warranty. Customers are more inclined to usage rather than ownership and anything that can make this usage easier and more price certain will have a natural place. Warranties should be seen as a natural product matching the product to the contract length. I do like the idea of providing an extra year of cover to help the GMFV because that would make the PX proposition more appealing to the dealer; one worth testing.
Do dealer ‘guarantee’ schemes have a place in the market? Are they on the increase? What are their advantages and disadvantages?
Dealer guarantee schemes are very popular and it is an area we are very active in supporting. An important feature to recognise is that they are very flexible and dealers will often seek out high levels of cover for their customers – many of our dealer customers opt for Gold Plus and Platinum Dealer Guarantees, which include wear and tear, extended parts included and higher labour rates.
AutoProtect acts as the administrator for the dealer, just as we would for insurance backed programmes and we follow the same TCF principals. So, while such schemes are not FCA regulated, our dealer guarantees do adhere to the guidelines published by Motor Ombudsman/Trading Standards for Vehicle Warranties to provide a quality metric.
Kia has excelled in using its seven-year warranty to boost its brand and new car sales. Could dealers do more to use extended warranties as a marketing tool for used cars?
Yes. If the Kia warranty has proved anything, it is that customers like a long term extended warranty. For sure, it is included in the price, which means no sale conflict concerns, quite the opposite in fact but this only points to the way a long term used warranty could be included in the wider customer package.
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