REDUCED margins on used cars are driving increased dealer interest in getting the most out of added value products, a warranty provider said today.
Damian Tyler, pictured, head of business development at The Warranty Group, said there had been additional momentum behind warranties, service plans and Gap insurance in recent months.
‘Pretty much across the board, increased price competition and higher costs of acquiring stock mean that the margins on used cars continue to be under pressure.
‘Smart dealers are therefore looking to make more out of the total sale, and one way to do this is to ensure that their added-value product portfolio is appealing to used car buyers and being promoted effectively.’
He said that dealers were taking a fresh look at their added-value products – how they were sold, whether staff were correctly trained and how to create interest in the showroom and online.
“Much of the thinking from dealers is linked to the expectation of a continuing economic slowdown. They know that at times such as this, motorists will tend to look to products that provide a safety net against unexpected costs, and many added-value products do this.
‘It is about ensuring that you are able to offer extended warranties that provide good coverage and value, service plans that spread costs effectively and Gap insurance that delivers easy and effective protection.’
He added that The Warranty Group, which was highly commended in the Warranty Provider of the Year category at this year’s Car Dealer Power awards, had been working on overhauling its products, systems, training and promotional material in key areas, and was able to offer dealers a range of new approaches, including introducing a hybrid warranty-service plan.
‘It is clear to us that the market is going through a period when many dealers are looking again at their added-value product offering, and we want to be in pole position when they undertake their reviews,’ he said.
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