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Dealer groups look to review warranty suppliers

Several major dealer groups are undertaking reviews of their warranty providers in a new trend reported by RAC Warranty.

The company explains that dealers are continuing to search for additional revenue and are looking for more support from warranty suppliers in areas such as training and administration in order to help them achieve this.

Ian Simpson, sales and marketing director, said: “This is very much something that we have seen developing through Q4 of 2009 and into the first quarter of the New Year.

“A number of large dealer groups that we have been trying to persuade to review their supplier situation for some time because we believed the existing warranty provider was underperforming have suddenly opened their doors and are willing to enter into a dialogue and then open themselves up to changing supplier.”

Simpson said there was no particular reason for dealers to be looking to change now other than groups systematically looking at every area of the business during tough economic times to maximise potential revenue.

As a result, Simpson said there were more businesses reviewing the warranty sector than RAC Warranty has seen for “several years”.

Simpson added that the key factors being taken into consideration by dealer groups when appointing warranty providers surrounded the level of support being provided – from training of dealer staff to ease of administration to quality of point of sale material.

He explained: “Dealer groups who are dissatisfied with their existing supplier tend to feel that they are simply not getting enough help when it comes to selling larger numbers of warranties and upselling to longer and more comprehensive warranties.

“What they want is a clear demonstration that warranty providers will provide long term support especially to staff who are selling warranties to customers, putting in place a proven infrastructure that will help to maximise warranty sales over time.”

Simpson believes that this process of supplier review will continue across the market during the rest of 2010.

He said: “These market trends tend to have their own impetus. Staff from one dealer group which has changed warranty supplier and achieved good results will talk to staff they know from another and prompt them to think about taking action - plus there are other factors such as media coverage. We expect the 2010 market to be very active.”

 

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