Fourth quarter warranty sales increase by 30 per cent
RAC Warranty continues to see dealers maximise warranty sales
A 30 per cent year on year increase in sales of warranties has been seen at RAC Warranty in Q4 of 2009, with dealers continuing to increase penetration of used car warranties.
Ian Simpson, sales and marketing director at RAC Warranty, said that dealers had learned during the recession to both sell more warranties and to upsell the level of warranty cover.
He explained: “Dealers have recognised that warranties are an ideal way to generate extra revenue and have been, with our support, improving their warranty sales programmes in order to maximise the opportunities available.
“This is something that is very much welcomed by used car customers. In uncertain economic times, they want to avoid unexpected motoring costs and many want to increase the level of assurance offered by their warranty.
“The warranty solution that we provide to dealers and customers appears to be ticking all the right boxes in the recessionary environment – from strength of cover to pricing, and from easy administration to the RAC’s unparalleled brand recognition.”
A key factor in the growth seen by RAC Warranty has been five point plan initiative, called “Critical Success Factors”, which is designed to provide a framework for dealers to make the most of warranty sales.
Simpson said: “As a programme, we have consciously made Critical Success Factors as easy to understand and implement as possible. There is no wizardry – it is simply designed to ensure that warranty sales are approached in a structured and committed fashion.”
Simpson continued: “Where warranty sales are not reaching their potential, it is usually because there is a lack of commitment on the part of dealer management and a lack of understanding on the part of sales staff.
“Critical Success Factors tackles those problems by introducing an infrastructure for warranty sales at each dealership and has provided very useful additional revenue to used car dealers during the recession.”
Simpson added that there was a strong sense of momentum behind the growth of the RAC Warranty brand and that he expected warranty sales increases to continue in 2010.
He said: “While it is difficult to make accurate forecasts during the recession, we continue to sign up dealers ranging from independents to major dealers groups at a consistent rate, and we can see no reason why this will not continue in the medium term.