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Insight: The best route to warranty renewal

Audi offers a two-year unlimited mileage/three-year capped at 60,000 miles on all new vehicles and at the point of sale the customer can purchase a fourth or fifth year factory extended warranty product.

Added Greenberg: “We don’t want our customers to keep their cars into the fourth or fifth year; we want them to buy a new car.”

Administered by Allianz (formerly Mondial), the Audi Approved Warranty contacts vehicle owners two months before the end of the third year factory warranty as part of an opt in or out scheme for its dealers ‘to make customers aware of the available top up products’.

An Audi spokesperson said: “We administer the warranty renewals programme to give customers peace of mind and encourage loyalty to the brand.”

Liz Grindell, head of warranty and F&I products at Allianz Global Assistance thinks the aftersales team can be key players in the renewal cycle.

She said: “Ensuring there’s a joined up process between the workshop and the service reception teams is key in spotting potential warranty sales opportunities.

"Aftersales staff are ideally placed to discuss its features and benefits with customers due to their technical expertise.

"Warranty companies can add value by looking at existing dealership processes and suggesting where and how the warranty conversation can integrate.”

Independent warranty company MB&G operates its own warranty renewal programme to help dealers retain their customers and in the past year take-up has been exceptional with a 133% increase in renewals.

However, managing director David McPhee said: “An untapped and under-utilised, yet very obvious point at which an extended warranty can be sold, is when the customer returns for servicing.

"Service advisers could be tasked with spotting if a customer does not have an extended warranty or if a warranty is about to expire and while the vehicle is in the workshop, the F&I staff should be on the phone pointing out the advantages of an extended warranty.”

By contrast, WMS Group, which administers the Safe and Sound programme, has helped dealerships boost revenue with an extended warranty promotion at the point of sale.

Safe and Sound dealerships are required to issue a mandatory six month warranty and recovery package, but WMS offers a range of incentives for buyers such as up to 50% cover free of charge when upgrading to a longer term.

The promotion has seen some businesses achieve around an 80% conversion rate – or in monetary terms, up to a
400% ROI.  

 

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