Good Warranties are Car Buyer Critical

“Too many dealers are underplaying the importance of a quality used car warranty to gain and retain customers, enhance customer trust and build their reputation.”

This is the stark observation from Adam Head, Northern Zone Director for AutoProtect, following an assessment of the use of warranties in online promotional activity undertaken for the business.

The recently published Car Buyer Trust Index produced by CarGurus confirmed the crucial nature of trust in car buyers’ decision-making processes. The report noted that while a fair price is a primary factor for most buyers, many are willing to pay a premium for what they see as a superior product or service. Within this, trust in the dealer is a crucial factor. In terms of trust-building, the warranty was identified by car buyers as a critical element.

Guided by this insight, AutoProtect has sought to establish how effectively dealers are leveraging the power of warranties in their online marketing. In short, there is room for improvement.

To help gain an understanding of the current state of the market, an assessment of a car buying experience was conducted. The assessment focused on the purchase of a used Mini through independent retailers on a leading online car buying marketplace. The findings are as follows:

  • Just 18% of adverts drew reference to the warranty in the copy, car images or ‘services offered’ section

Clicking through to dealer sites:

  • 76% provided no warranty product information on provider or coverage

In terms of the warranty available with the car:

  • 52% made no mention of the warranty or no specific information on the period of coverage available on the car for sale
  • 32% offered a three-month warranty
  • 14% offered a six-month warranty
  • 2% offered a twelve-month warranty

To conclude, Adam notes:

“We recognise that many of those dealers who did not mention a warranty or the specifics of coverage do provide some form of cover, but they risk under-selling themselves. Going further, there is potential for dealers to differentiate themselves by offering a more extended warranty, promoted strongly online, in the purchase price to help move away from a commoditised price-led approach.

We will be visiting all of our dealers to stress the potential of greater warranty transparency online and ensuring they know we have a portfolio of product support videos that they can use to enhance the customer experience.”