Motorists gamble over warranty purchase
The latest survey from Allianz Global Assistance UK reveals that over three quarters of used car owners have never bought warranty cover and nearly 40% cite cost as the main reason.
Many respondents of the survey (28%) believe that committing to regular servicing means a warranty is unnecessary, and others (32%) just feel they would rather ‘take a risk’ than pay up front for cover.
With over 30 million cars over two years old on the UK roads, a figure which is predicted to rise, Allianz Global Assistance believes that manufacturers and dealers are missing out on significant opportunities. High-quality training for sales executives should focus on how to educate used car owners of the benefits of extended warranty programmes, as well as how to take advantage of an up sell opportunity.
When asked to pick the three most important aspects of a warranty package, if they were to buy one in the future, 77% of used car owners said they would want labour and parts costs to be included. In second place is the option to pay monthly, with 37%, followed by both a choice of cover levels to suit their budget and a realistic policy excess – in joint third place, with 32% each. Close behind that was the desire for genuine manufacturer parts to be used in any repairs at 31%.
Liz Grindell, head of warranty for Allianz Global Assistance in the UK, commented, ‘It’s clear from our survey that those vehicle owners who have never benefited from a warranty package – either as part of a new car ownership scheme or have purchased one by choice – don’t recognise the value of cover. The reality is that good warranty packages offer many of the features motorists are actually looking for, providing a key window of opportunity to up sell the benefits.
‘When looking to sell a warranty product, focusing on the financial benefits would be a good approach as these appear to be the main concerns for car owners. This angle is especially strong if the customer would be able to pay monthly, and has a choice of cover levels to suit their budget. In addition, it’s important to point out that genuine manufacturer parts are used, and highlight the quality of training received by technicians.
‘It’s also interesting to see that nearly a quarter (24%) would want a company with a good reputation in claims handling, if they did buy a warranty, confirming that good customer service remains crucial. Manufacturers looking to promote their warranty offering, should make sure they clearly promote these key benefits to boost sales and enhance their customer experience.’