Winning Warranties - Time to Create a New Impetus

Now is the time for dealers to take a fresh look at extended warranties; the products they offer and the way they are promoted.

This is the view of AutoProtect whose distinctive approach saw it recognised as the Warranty Provider of the Year at the inaugural Motor Trader Quality Awards.

“As dealers look to find an edge that helps sales, retention and lifetime value, warranties are an often utilised tool that dealers should be looking at once again. Changes in the way customers find their car, the developing regulatory backdrop and a new generation of warranty
services, simply add to the potential possible,” notes AutoProtect Director Nick Wake.

AutoProtect points to two key areas where it feels dealers can benefit:

Using a high quality extended warranty as a differentiator

A transparent, high-quality warranty speaks volumes for the dealer and can help to build a higher level of trust, improve reputation and generate customer referrals from satisfied claim customers.

On the other hand, a poor quality warranty can simply undermine these attributes.

Not all warranties are the same and just saying a car has a warranty is simply not enough.

Dealers should review the scope of their warranty and the way in which it is promoted. AutoProtect has established a new level of product flexibility with its insurers, as evidenced by the creation of its Gold Plus warranty, developed with dealers to provide a higher quality product. While this product may not be suitable to everyone, the flexible and innovative principle that can help ALL dealers is very much available.

Nor is it just the warranty product and process in the showroom that dealers should be reviewing.

Including a long-term warranty in the sales price

All too often, dealers have offered minimal warranties. A three or six month warranty and/or a warranty with limited coverage may mean lower costs to the dealer, but it can risk long-term reputation damage.

Today’s buyers are looking at a dealer’s reputation, not just their stock. The limited warranty has the potential to be a misguided saving, delivering short-term gain but long-term pain. Reputational damage is tough to overcome, especially in today’s instant review world.

The impact of AutoProtect’s call to quality and a commitment to continuous improvement has served the business well. Growth every year for the last seven now sees over 3,000 dealers promoting the business’ warranties across the UK.

In closing, Wake sets all dealers a challenge: “We should all be on the lookout for that innovation that can help our business’: what we should not overlook are the improvements and opportunities available from established services. As Uber has shown, an established
service can be re-invented. So, what gains can your business make from warranties?”

Ten Warranty Action Points for 2017

Review the cover provided by your extended warranties.
Review your use of warranties as a sales aid online as a differentiator.
Establish just how much revenue is generated in aftersales from warranty work.
Don’t forget LCVs – they need a quality warranty as well.
Test your team – how much do they know about your warranties – not all are the same, so it may be time for some training.
Promote warranties as a service and/or differentiator online with videos, comparison information and specific benefits.
Use warranty claims as a promotional tool, especially through social media. Promote your good reviews.
If you use a self-funded warranty review its suitability, especially in light of the Consumer Right Act.
Assess the customer’s perception of your warranty in any post-sale follow up.
Set your business a new penetration growth target and measure performance