Great so we can get back to Work.
After what seems to have been an eternity, as of 1st June, Car dealerships can reopen to the public if they are ‘Covid Safe’. So, whilst dealerships are preparing to reopen, its important to remember that customer buying habits will have evolved during this time of lockdown and that what was best practice before may not be now. We have already seen the rise in dealers implementing online vehicle sales and many now looking at the potential for safe vehicle delivery.
How can offering a comprehensive warranty help?
At the WMS Group, we believe, now more than ever consumers will be looking to protect their new vehicle purchase, with a comprehensive warranty agreement, giving them the additional piece of mind that if the worse was to happen to their vehicle the cost of the repair of that vehicle is covered.
This is further explained by WMS Group, National Sales Manager, Malcolm McIntosh.
“Providing a good calibre of warranty with every vehicle you sell, not only gives the dealer the opportunity to upsell additional product, and thus additional revenue, it negates the risk that if a claim was to made against the vehicle, the warranty will cover the costs.”
When do I introduce warranty into the sales cycle?
With the ever-evolving customer sales journey and with more vehicles now being potentially purchased online. It is important to introduce the warranty to the customer, early in the sales cycle. By highlighting the benefits at an early stage, the customer is already engaged and more willing to purchase the warranty with the vehicle. Waiting until the customer has already viewed the vehicle, test driven it and even agreed finance is now far too late, especially with social distancing measure being enforced face to face time with customer will be kept to a bare minimum.
Price vs Benefit
Now more than ever, consumers will be more price conscious, with many seeing their income reduced during the past couple of months, so paying an additional cost for a warranty maybe seen as an unnecessary purchase and owning a vehicle without a warranty is risk they are willing to take. Dealers need to educate the customer of the real value of the warranty and the protection it provides. The cost of a warranty is significant, but the cost of a mechanical or electrical failure could be even more expensive, if your vehicle does not have the added protection of a warranty.
Also, warranty payments do not necessarily have to be an up-front cost, as Malcolm explains
“Consumers can be put off by purchasing a vehicle warranty due to the additional outlay at point of sale, but by offering an interest free, monthly payment option (which WMS warranties do) does make it more appealing, and can considerably increase uptake in warranty sales.”
Work in partnership with your warranty provider
This explained further by Malcolm
“At the WMS Group, we work closely with our dealer partners, whether that is providing them with bespoke Point of Sale material, Sales aids to help with promoting the benefits of the warranty and product training., These are all key to maximising the upsell opportunity that providing a comprehensive warranty can bring to the business.”
Staff training is a key element, to enable Sales teams to understand the product they are selling, its USP’s and articulate the benefits to the customer when objection handling. This is where the WMS Group will be able to help, either with staff training or simply being contactable for advice and recommendations.
Make sure the warranty you provide is fit for your dealerships needs
We are all very busy, getting vehicles cleaned, prepped and ready to drive away in preparation into kick starting sales and getting 2020 back on track, but if you can spare the time ask yourself the following questions:
- Does your warranty provide the level of cover that you match the service I want to provide my customers?
- Does my warranty offer any other additional benefits such as free breakdown and recovery? How quick are authorised claims reimbursed, is it within 24 hours or do customers have to wait days or even possibly weeks?
- Does my warranty provider offer 24/7 support?
- Can customer purchasing a warranty, pay monthly?
If they do, that is great but if not, maybe I need to look at an alternative partner that meets these needs.