Almost six out of 10 drivers would take out an extended warranty with their next car, according to new research for the RAC Dealer Network – and would be keen to buy at the point of purchasing their vehicle.
The survey of 1,164 respondents was carried out by Harris Interactive for Assurant, which partners with the RAC in the warranty and aftersales sectors, and showed that 59% of drivers would take out a longer or more comprehensive warranty with their next car, while 27% were unsure and only 14% would not.
The research also found that an extended warranty came top out of a list of eight products that might be offered with a car by a dealer and which consumers might “seriously consider.” Responses were 48% for extended warranty, 44% for service plan, 42% for breakdown recovery, 25% for GAP insurance, 18% for minor cosmetic damage insurance and 15% for each of tyre insurance, combined tyre and alloy wheel insurance, and alloy wheel insurance.
Kellie Grocott, RAC director of sales at Assurant, said: “These findings reveal two very important facts – that there is a high level of interest among consumers in buying an extended warranty, and that propensity to buy appears to be higher at the point of purchase,
“Really, this underlines how a properly structured warranty programme is something that car buyers want from their supplying dealers, and also the huge potential for tapping into additional revenue streams that exist for dealers by meeting this demand. Dealers who aren’t taking warranties seriously are missing out on this significant opportunity.”
Kellie added that the fact that more than four out of 10 buyers were interested in buying extended warranties, service plans and breakdown cover at the point of purchase, was also significant.
“The research illustrates there is a substantial customer base for all of these products and our experience shows, if they are presented to customers in a manner that explains their benefits and the value they represent, sales penetration is high.”