Willis said the team handles several claims a month from internet-purchased warranty products, but often find themselves in the position of delivering bad news to customers, despite attempting to help and negotiate with the provider.

Liz Grindell, head of warranty and insurance products at Allianz Global Assistance, which provides warranty products for Mercedes-Benz’s approved used programme, said: “Encouraging dealers to support manufacturer-backed warranties will always pay off – if the product has the manufacturer name on it, good cover levels and good service levels from their appointed warranty provider will be delivered as they will be working to pre-agreed KPIs.

"A cheaper warranty may look good on paper, but when it comes to paying claims the old adage “you get what you pay for” comes into play.

"And the last thing service advisers need is a sense of trepidation every time they try to make a claim with the thought of having to explain the claim has been rejected to the customer.”

Undoubtedly, the latest systems and processes, such as self-authorisation by the dealer and online claims and invoicing, operated by most of the warranty companies, make the lives of service advisers relatively straightforward.

It appears that while an increase in product sales does equate to a rise in the volume of claims, the proportion has not intensified and online systems with clear processes in place as well as a degree of autonomy
lightens the workload.

Although having specialists at the end of the phone is also vital, or as Motorway Direct’s commercial manager Paul Hanna put it, being able to have “a sensible real world interpretation of the policy conditions to achieve mutual customer satisfaction” when claims “fall outside the rules”.

Grindell added: “Our role is to provide a good, plainly written product that helps ensure customers know exactly what they can and can’t claim for. If it’s a valid claim, we will pay it.”

Strong appeal to consumers

Ian Simpson, RAC Warranty sales and marketing director, said: “A warranty is a safety net when unexpected motoring costs arise and that is something that continues to have strong appeal to consumers.

"When the credit crunch first bit in 2008-09, there was a general increase in warranty claims, but this has long since returned to something like historic levels.

"The important thing for warranty companies is to remain true to the level of cover provided and consider each individual claim on its own terms. If

"it is a fair claim, the warranty company should pay quickly and without complaint.”

Simpson believes the issue facing dealers is the speed of claims. He said: “Clearly, many dealers are operating at a low profit margin and remain under pressure, so the time it takes for the warranty company to process and pay a claim is crucial.”

Similarly, Mapfre Warranty’s head of new business Steve Burgess believes all providers should be focused on making the lives of their dealer partners easier: “Firstly, providers should be working with dealers to understand their business, their customers and their stock profile to ensure that the correct warranty programme is in place.

"Secondly, comprehensive support and point-of-sale presentation tools are essential.

"In addition, working with dealers to continually monitor performance and manage any issues is key.

"All of this has to be backed up by a first-class claims service both for the customer and for the dealer.”

It seems, then, the increase in warranty uptake is beneficial all round, including for the customers themselves.

"In fact, the warranty companies agree the customer is driving much of this interest in warranty products.

According to Mapfre Warranty, customers expect used cars to be sold with a warranty and believe it should be for 12 months and its own research shows customers willing to invest in a warranty as long as it provides quality cover presented in a clear, easy to understand way.

Warrantywise online marketing manager Richard Hodges said: “We have seen more claims as a direct result of a large increase in sales.

"One contributing factor to this increase in sales is the customers’ tendency to hold on to vehicle for longer periods.