8:46 am, March 3, 2009
THREE month free warranties on older cars have recorded a 22 per cent increase in car dealer take-up recently.
Mondial Assistance is the 2nd-largest warranty provider in the UK, and says demand for its 3 month warranty is booming.
UK warranty manager Liz Grindell said: ‘As tough times continue to squeeze profit margins across the motor industry, many manufacturers and dealers are looking to add value whilst seizing revenue opportunities.’
This, she says, is where the 3 month warranty comes in.
‘Traditionally, a 12 month warranty has been offered as part of an approved used car programme, but we have worked closely with our clients to deliver a comprehensive warranty package that manufacturers and their dealers still provide to their customers but for a shorter period of time.
‘This allows dealers to offer customers an attractive deal on older vehicle stock that they may have previously shied away from promoting.’
There are other benefits, too. ‘Boosting older used car sales volume will generate interest in younger makes and models by increasing forecourt traffic.
‘In addition, this not only reduces dealer resale costs, it gives them the opportunity to increase revenue by selling on an extended warranty package.”
As customers are responding in droves by buying more used cars, so dealers are reacting, too.
‘Across the board, our figures show that more and more dealers are focusing on warranty to boost customer loyalty, which makes sound business sense as new car sales continue to decline.
‘Although consumers are wary of making large financial commitments, they are prepared to protect their assets in a bid to avoid unexpected expense. If a manufacturer can deliver the right level of comprehensive cover that encompasses excellent support when the customer needs it most, they should secure high levels of customer retention to see them through the recession.’
