AM Online

Policies need explaining

Dealers need to be more transparent when explaining the terms and conditions of warranty products to customers, to reduce complaints and improve the image of the sector.

Car Care Plan chief executive Tim Heavisides, reacting to an article in AM (November 3), believes the industry is in better shape than ever but that there are several issues, including that of betterment.

A betterment clause concerns repairing cars to a better condition than before the failure occurred, for instance replacing four pistons when one has failed. It means the customer would be liable to pay part of the cost, even though the repair was necessary under the warranty.

“We do not have this clause, but there are several warranty companies that do and that is an issue,” says Heavisides. “It will contribute to the number of complaints.”

He believes dealers need to spend more time qualifying customers and ensuring the warranty product meets their requirements. They also need to fully explain the terms of the policy, in particular conditions such as betterment.

“When dealers are looking for a warranty provider, they need to make sure they understand the terms and conditions on the consumer and that they are comfortable with those terms,” says Heavisides.

Car Care Plan pays out 92% of its claims – 20,000 per month – which it says means its premiums are often higher than its competitors. “Dealers should not focus on price when selling the package; they should focus on the service that come with the warranty package,” Heavisides adds.

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