Warranty/service plan hybrid ‘will help dealers maintain margins in 2018’

Warranty/service plan hybrid ‘will help dealers maintain margins in 2018’

AN innovative warranty/service plan hybrid could help used car and van dealers to maintain under-pressure workshop profit margins in 2018, says The Warranty Group.

Damian Tyler, head of business development, said that interest in the product – called Service Plus and believed to be the first of its kind – was already high among dealers ranging from franchise groups to independents.

‘What we have is a product that we believe is very much in tune with the times, meeting car and van buyer demands for a simple but comprehensive solution to everyday motoring costs as well as dealer requirements for something that increases retention and helps maintain profitability.

‘Service Plus is designed to be sold either with a used car purchase or when a customer is paying for servicing and, as such, provides more sales opportunities than traditional warranties or service plans. Importantly, it is simply priced and structured and its features can be explained in seconds.

‘It will be markedly effective, we believe, in helping increase customer retention with owners of vehicles more than three years old. Workshop maximisation in this sector is going to be a key driver in maintaining profitability in 2018, we believe, and the product can drive this aim.’

Service Plus is designed to provide a complete aftersales warranty and service solution for used car owners, with simple pricing based on engine size. It covers any car up to 10 years old and is paid for as 10 equal monthly amounts.

The product was introduced on a trial basis last year and has already proved a big success.

Target group consumers in a series of focus groups held at the end of 2017 – a mix of existing warranty and service plan holders – said they highly valued its benefits and would consider buying it if offered by a dealer.

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