3: Extended warranties
Quality of staff and process are the two key elements to success in selling extended warranties, says Nick Plevey, managing director of Skurrays, which has Vauxhall dealerships in Swindon, Oxford and Marlborough.
With the company also operating as a Network Q centre and some models covered by Vauxhall’s lifetime warranty, only selected used cars represent a sales opportunity. Those come with six-month cover from WMS Group as standard, with the choice to upgrade to Skurrays’ Ultimate Warranty for 12, 24 or 36 months. This is also a WMS product.
Plevey said 44% of customers who could buy, do. “The sales executive is responsible for building the relationship with the customer – including qualification and test drive – and the sales controller will put together the deal on an offer sheet. It will include GAP, paint protection and a warranty if it’s appropriate, and that becomes the point of negotiation.”
He added that staff won’t substantially discount the warranty, because if there’s not a reasonable level of profitability in it they won’t get commission.
Plevey is also a firm believer in honesty and integrity. “We
don’t try to sell something to someone where it’s not appropriate,” he said.
“We deliver good results on the products we sell because we do it the right way and don’t charge silly prices.”
He added: “It’s also about the quality of process and I’d say the key element is qualification. ‘How long are you planning on keeping the car? Three years? Okay, so you’ve got two years of manufacturer warranty left, so you can fill the gap with a 12-month warranty.’ We wouldn’t try to sell a 24-month one.”
As to growing the success percentage, Plevey said there was no magic answer but that 50% was achievable. “It’s just more of the same – culture, training, regular reviews, measurement of performance and relevance of the product.”
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