Nick Wake, Sales Director, was asked to comment in this month’s warranty feature.
A survey carried out in mid-2015 found that 78%* of car buyers had never bought warranty cover. In this context what are the key steps dealers can take to boost extended warranty business at the point of sale and/or online?
We cannot comment on the specifics of the survey, except to reflect we suspect that this figure may vary dependent upon the age of the car and buyer profile. What is evident is that customers do value an extended warranty and this is clear from the impact of the 5 and 7 year warranties made available by some manufacturers on their new cars.
I think one interesting area that the dealer should consider is the opportunity of offering longer extended warranties on their used stock to differentiate their proposition to consumers. Also, this strategy offers a degree of protection from any long-term problems that may surface courtesy of increased consumer protection in areas such as the Consumer Rights Act.
What evidence is there of dealers boosting warranty business after the car sale through contact centres, SMS and emails for example?
Post sale activity in isolation, as a substitute for point of sale promotion, is not as effective as a professional presentation by the sales executive. However, there is a place for such activity to support renewals, giving customer the opportunity to extend their protection.
Dealers make money from selling extended warranties but what evidence do you have that warranties impact favourably on customer satisfaction and retention and the overall car buying experience?
Dealers can make money from promoting extended warranties but that should not be the only factor considered by dealers in their warranty strategy. An extended warranty provided by a dealer can create a point of differentiation, demonstrate confidence in the car and help to develop a long-term customer relationship. As such, it can help to sell cars.
Customers opting to extend a warranty are buying the peace of mind. This is especially true when the firm providing warranty services has approval from a respected organization, such as MotorCodes, which AutoProtect has.
Most customers buying an extended warranty would prefer they never have to utilise it but on the whole they value the protection afforded in our experience. When a warranty is utilised, the impact on satisfaction is undoubted; conversely if the dealer did not offer a warranty extension and subsequently it would have been useful, inevitably there could be a negative risk to the dealer.
Do you have any new developments or products in the pipeline that will impact on dealers’ sales and marketing of warranties?
AutoProtect’s new automated claim’s system, i-Claim, has a significant impact in accelerating the claims process. Time on the phone has been dramatically reduced and has commonly been eradicated; decision times have been improved and dealers are being paid more quickly. As well as improving the claims process for dealers, the experience for customers is also better when a claim against the warranty is made.
AutoProtect reviews its warranty product coverage continuously to reflect the developments in today’s vehicles; multimedia cover, wear and tear, cover for vehicles with high mileage are some additions. Being flexible and putting together a warranty that suits the demands of the dealer’s car parc and their customers is also a great benefit.