Scotland’s leading trade publication Scots Autoscene interviews our business development director Eric Stone on how dealers can find the right warranty company for them.

Q: When dealers are looking to change warranty provider, what are the main things that they look for?

A: The four main prerequisites dealers tend to look for are flexibility, exceptional claims handling, affordability and the ability to boost bottom line profit easily. Many dealers used to offer their customers our more basic warranty products, but with end-users these days expecting much more, we are seeing a growing demand for providing a higher level at the point of sale. Even if the dealer only offers three months as standard, they will still be able to generate many upsell opportunities on duration or claim limit – and these higher products not only offer greater protection to the customer, but also protect the dealer’s profit margins in the long run.

The key driving factors shouldn’t just be about safe guarding the customer though, but also optimising customer retention levels, workshop absorption, cash flow and perhaps most importantly, margins. On the latter point, many WMS Group dealerships have reported a staggering 30% uplift in profit during the first twelve months of working with us. This is largely because we work with them to create a bespoke solution based on their needs, then support and train them every step of the way to ensure they are maximising each opportunity.

The big reveal however is usually when it comes to claiming, and sadly we hear of many companies that thrive on making it as difficult as possible. All our claims are handled the old fashioned way – via telephone through qualified engineers, not automated website forms – and last year we paid out 92.4% of ALL faults reported to us. If it’s a claim, we pay it, simple as that! Unlike some other warranty companies, we won’t stipulate what level of cover/duration/claim limit our dealers offer either, or that they meet a minimum quota of product sales. Repair work can even be carried out in their workshop, to bring revenue back to the business.

One issue that is often overlooked when choosing a provider is the backing of a leading insurer, which is financial protection for them and the customer in the event that the company ceases trading or cannot meet their obligations. The WMS Group are underwritten by the global insurer AmTrust International and dealers are required to be regulated by the Financial Conduct Authority (formerly Financial Services Authority) to offer insured products – although we do have a solution for all non-regulated businesses where they can use our guarantee products.

Q: How does WMS go about making this process as easy and cost efficient for their dealers as possible?

A: First of all, the dealer decides what levels of cover they want to offer, not us – whereas some warranty companies only offer one or two products, which puts many dealers off. Others may also want to lock the dealership into a long term contract, charge for point of sale materials/policy books, and/or deliver poor service when it comes to the crunch, whereas we don’t do any of those things. Instead our relationships are built on quality, value and having the right people, and by doing most of the hard work, our dealers can focus on the important bit – their customers.

WMS also provide free, ongoing sales and business development training to all of the customer facing staff at our dealerships. We don’t have to do this, but do because we care profusely about the motor trade’s survival – and if our dealers know how to maximise each sale with access to the right products and incentives (such as 50% cover free of charge), they will continue reaping the rewards which means remaining loyal customers for the duration. All of our products are surprisingly affordable too, and we have a range of services (many unique to us) which allow dealers to capitalise on their customers at every opportunity.

Q: What are the main facets of the warranties you offer that makes them beneficial for the end-user?

A: No excess contributions, unlimited claims (with each one up to your chosen claim limit – maximum current market value), claims settlements that include the costs of parts and labour, no annual mileage restrictions, up to 60 days of EU cover, vehicle hire, plus transfer and renewal subject to our approval. Most of our warranty products are available from between three months to lifetime cover (renewed free of charge every year subject to proof of servicing), and there are several incentives for customers to purchase a longer term, which makes upselling as easy as possible for the dealer. The initial purpose of a warranty is to protect the consumer from spiralling repair bills.

Q: Can you give some information on the range of warranties and other products you offer?

A: To our knowledge, WMS have the most comprehensive range of protection products available in the used vehicle industry, spanning every sector and business size. Our most popular is car warranty cover, but we also offer commercial vehicle warranty and motorcycle warranty, in addition to 24 hour recovery and breakdown, several GAP products, MOT cover, wheel and tyre insurance to name a few. Many of our dealerships are also promoting a number of products as part of a bundled package, which is seeing their penetrations and profit dramatically improve. One example of this is Skurrays Vauxhall, who increased their product sales by a staggering 40% last year.

Q: How does WMS manage to stay ahead of the game in a competitive field?

A: By continuing to launch innovative products (such as Safe and Sound – www.safeandsound.co.uk), listening to our dealers, making constant product improvements then listening some more! We are always looking for ways to help the industry, and last year we launched several new products including a pay-monthly Guaranteed Asset Protection for all cars and motorhomes in line with the FCA’s ‘Treating Customers Fairly’ principles, and a market-leading paint and fabric protection application.

We also work with a number of automotive suppliers such as CarCliq and Unipart, which enables us to deliver added-value to our network. Our alliance with CarCliq for instance, means that dealers will receive a discount on advertising their stock online, whereas if the dealer doesn’t have a workshop, we can direct customers to their nearest Unipart Car Care Centre for peace of mind across the board.

Q: Anything else you want to add about your products/company?

A: Additionally, we have a specialist aftersales team on hand to canvass any lost customers and even book them in for a service, MOT or vehicle healthcheck at the same time to drive revenue back to the dealership – which has resulted in many of our dealers seeing their product penetrations soar to around 80% over a 12 month period. All we take is a small, one-off commission from each sale, with no further financial obligations on the dealer’s part.

 A side note from Eric:

It is difficult to predict how the used car market will fare over the coming months, but we do know that the main problem currently facing the industry lies in the low supply of retail vehicles meaning that many dealerships have empty spaces, with forecourts only 80% full on average. To add fuel to the fire, we have noticed that buyers are also becoming increasingly selective, with the majority now opting for vehicles featuring less mileage, damage or minimal faults. Whilst values are remaining reasonably buoyant industry wide, the volume simply isn’t there so dealers are having to find other ways to make additional profit, which is where our warranty products come in.

The WMS Group provide a range of warranty packages to almost 4,000 vehicle dealerships nationwide, with several levels of cover to choose from, dependant on the dealer’s needs and budget. Sytner, Cooks Motor Group, Anthony Betts and Picador PLC are just some of our major clients, but we are also the approved aftermarket supplier for several manufacturers, covering the used vehicles which fall outside of their desired marque or age/mileage parameters.

For more information on our warranty products, simply click here request your free dealer pack or call Eric Stone on 07789 682502.