The market for service plans is reaching a point of “critical mass” with customer recognition of the product increasing massively in the last year, says The Warranty Group.
Sales and marketing director Ian Simpson said: “New and used car customers now ask for a service plan to accompany their vehicle purchase in ever increasing numbers.
“Just a couple of years ago, consumer recognition of service plans as a product was very low. Now we are within sight of a point of critical mass where they will become an accepted part of the market in the same way as a warranty.
“Our view is that soon a majority of the car buying public will know what a service plan is, and what it does without prompting. Dealers and manufacturers who do not yet have a product in place should move now.”
Dealers and manufacturers who had service plan programmes in place were also noticing a general upturn in interest and recognition from customers.
“Being able to spread vehicle maintenance cost across a small monthly payment has obvious appeal. It is viewed as better than finding hundreds of pounds for a service in one go.
“Our partners are very enthusiastic about the prospects for service plans and expect them to have an increasingly positive impact on long term customer retention,” he said.