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AutoProtect Vehicle Warranty Market 2013
Outlining the growth of AutoProtect and how used car warranties have performed over the last year.
AutoProtect warranty sales have grown significantly over the last 12 months. In total, an incremental 46,000 policies were added.
In a largely static used car market, this tremendous success can be attributed to a recognition by dealers of AutoProtect’
Great service to support dealers and warranty customers, policies that are clear and transparent are crucial. High levels of protection support this for the customer. The overall result is a growing recognition that AutoProtect’
2. What reasons to customers give for not taking a used car warranty and how can dealers overcome that?
In today’s austerity climate, customers want good value and they are often concerned about the integrity of financial services generally.
In this environment, it is important that customers are treated fairly and with respect. Good service is about ensuring that they know the full picture for any product offered by the dealership and that they are able to ‘buy’ products appropriate to their needs. This is the AutoProtect approach in training and supporting dealers. Anything else risks reputational damage that for dealers, often operating to a strongly local audience, can be very risky.
In short, dealers simply must adopt a stance of asking and listening when engaging the customer to help overcome any misunderstandings that may exist, but never to over-sell. In the same vein, not offering a warranty is an opportunity missed, especially if the customer subsequently experiences an unexpected problem.
Examples of approaches that can help to create value with the customer
‘It's too expensive’ - offer the customers solutions that enable customers to spread the cost over a number of months.
Not worth the paper it's written on – dealers working with reputable companies partnered with A rated insurers can claim that all of their customers are happy.
Already got a manufacturer’
The warranties don't ever cover what goes wrong - we have an all-mechanical and electrical policy with wear and tear option that will cover 99% of claims.
3. Are more customers buying used car warranties online and bypassing dealers at the point of sale?
With literally only a handful of exceptions, we are not hearing this from any of our 5241 dealer clients.
We believe that on-line warranties can, in fact, aid the point of sale experience. Face to face, customers can ask questions, gain a greater insight and acquire the warranty that best suits them and their car, with the knowledge that they can always liaise with their dealer on any future questions they might have.
There is certainly a potential threat from online offers; the key for dealers is to be more proactive and recognised as the best source for the right warranty product.
Over the last decade, AutoProtect have witnessed a steady shift towards lengthening manufacturer warranty durations that would at first glance seem to be a lost opportunity for dealers to make additional profit. The reality is that this has created more profit opportunity, twofold -
First is the emergence of the monthly warranty with multiple duration options to top up the manufacturer warranty to a three-year period. This option provides customers the same peace of mind they would get if their car were new. For the dealers, it provides an opportunity to upsell and a significant marketing edge that enables them to promote all cars with a three-year warranty.
Secondly and because some manufacturers cover decreases as the warranty matures, there lies an excellent opportunity to top up the component cover to ensure that it fully meets each customer’s expectations.
Manufacturer warranties have definitely made consumers more warranty aware and in turn more open-minded about other protection products, such as Tyre, SMART and Alloy Wheel insurances. All of these are profit centres in their own right, or bundled together make for an easier sell and a larger margin.
In summary, we know that with a correctly chosen product package, a well thought out sales process and consistent training there is more proven profit opportunity now than ever before. For more information on the subject see http://www.autoprotect.net/