SALES of extended warranties are up, as people hold onto their cars for longer.
Bad news for car sales? Well, the 28 per cent increase, since April, of Warranty Direct products for four-year-old models does, on the face of it, look grim.
People are committing to their current cars, rather than buying new ones.
But it does indicate an opportunity. Clearly, car buyers are still worried about ‘the unknown’. They want to avoid major expense, and know that their current car could expose them to this.
However, they’re not changing cars as they would normally do, because a half of all drivers reckon it would put too much strain on household finances.
Basically, people would like to follow their traditional three-year change cycle, but economic conditions mean they feel they can’t – hence, more sales of warranties to four-year-old vehicles, offering them the reassurance they’re seeking.
You should therefore think about schemes you have on offer to ease this ‘cost to change’. For example, a buyer financing a PCP coming to a close could actually pay less each month with a promotional scheme on a new model, rather than opt out with a personal loan.
What’s more, with a new car, you can point out there’s the full support of a full manufacturer warranty, plus freedom from MOT expenses, a new set of tyres, no road tax for the first year and the opportunity to select a much more efficient vehicle to slash fuel bills.
You’re certainly aware of how hard customers are finding things. But a little extra time in finding solutions to these worries could just win you an all-important sale.