Warranties ‘are vital’

Time 13 years ago

Warranties more important than everUPSELLING used car warranties allows dealers to increase profits and boost customer retention.

‘In the current climate, dealers, at the best, must aim for customer retention,’ says Ian Simpson, chief of RAC Warranty.

’Opportunities for aftersales are harder and harder – but, in an arena where used car sales are diminishing, aftersales are more important than ever.’


He therefore says that any tools to help retain this crucial service work are of vital importance. ‘Warranties can help solve this issue.’

He explained to Car Dealer how. ‘Most warranty claims are made in the 1st 3 months. The vast majority of this work goes back to the supplying dealer.’ Result? Both an opportunity to enhance customer goodwill, and also ensure paid-for service work in the aftersales division.

‘What’s more, we area also heavily marketing new types of warranty. Service Plan means customers can pay for expected servicing on a direct debit monthly basis.

‘Again, they’ll go back to the original supplying dealer for this.’ The current financial climate means forward planning and careful monthly budgeting is vital for customers. Dealers should therefore take the opportunity to upsell products such as this.

He is also candid about which products to choose. ‘For dealers, a pound is a pound.

‘If you want a warranty product, you want confidence that if a customer’s car goes wrong, the product covers everything it says it will.

‘You should therefore question the cheapest products in the market. Remember, your reputation partly rests on the quality of your warranty, too.’

Remember, he warns, it’s your reputation at stake. ‘Customers are looking for two things from a warranty – whether it pays out, and what the customer experience is like.’

By Richard Aucock

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Car Dealer has been covering the motor trade since 2008 as both a print and digital publication. In 2020 the title went fully digital and now provides daily motoring updates on this website for the car industry. A digital magazine is published once a month.

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