As the pandemic continues to change consumer buying behaviour, WMS Group has asserted that consumers deserve better information on the value of extended warranties as the leading vehicle warranty supplier challenges retailers to go to greater lengths in educating consumers.
With research undertaken by WMS, startling statistics show that nearly eight in ten (78%) of consumers take out a warranty1 – but surprisingly only a fifth of those pay to extend it. However, Craig Grant, Commercial Director at WMS Group, states there is a ‘huge need for clearer and better consumer understanding’ of the benefits extended warranties can bring, as nearly half (46%) of customers would be likely to extend their warranty if they were offered it.
According to WMS Group, although new cars come with a manufacturer’s warranty that should provide peace of mind, for anything from three to seven years if customers are planning to keep their car for longer than that, or if they’re buying a used car that’s out of its warranty period, taking out an extended warranty ought to be a serious consideration.
Key benefits of extended warranties retailers should be educating consumers on include peace of mind against unexpected repair bills and good value for money. In addition, educating the consumer also benefits dealers – not only in terms of the additional revenue opportunity upselling extended warranties provides, but more importantly increasing the likelihood of repeat business by helping retailers build that personable, trusting relationship with customers.
Craig comments: “As the second most expensive purchase after a house, consumers really do deserve to understand the value that extended warranties can provide in protecting that investment. From our research, the interest in purchasing an extended warranty is substantial; but only a third (32%) of people are even aware they exist.
“Clearly then, consumers need better education on why they need to invest, and of what benefit it is going to be for them in the long run. After all, if their vehicle does need a costly repair, they may feel more inclined to sell it if they have no extended warranty, as persistent repairs may add up in the long run. For dealers, it’s also about considering the additional revenue opportunities of upselling extended warranties, which undoubtedly is a welcome boost after having their income curtailed during the pandemic.”
WMS adds car retailers are best placed to maximise this opportunity by providing clear and concise information around the advantages of extended warranties and the long-term effect it has on vehicle cover – essentially, helping them win the trust of car buyers.
“Equally, it is important to treat the customer fairly, and ensure that the coverage they may be thinking of purchasing, may not be appropriate for that specific vehicle – this is where dealer can really stand out among competitors. Ultimately, it’s about putting the customer in the driving seat and ensuring their needs are at the forefront of any conversation.”
Providing reliable extended warranty cover and other motoring protection to over 3,500 dealerships across the UK, WMS Group supplies a wide range of trusted solutions. For further information about WMS Group, visit www.wmsgroup.co.uk.
1 WMS Dealer Research 2021