According to the RAC Dealer Network, warranty sales increased 13% by unit in 2018, marking the fifth consecutive year the network saw double digit growth.
Sean Kent (pictured), sales director at the RAC Dealer Network, which partners with Assurant in the warranties and aftersales sector, explained that the increase had been powered by a number of factors including a generally buoyant used car market, higher consumer interest in longer and more comprehensive cover.
Growth in the RAC Dealer Network's number of dealers in the network, enhanced product support and development, and higher sales of warranties at larger dealers had also been contributing factors.
Kent said: “This was a strong year for the used car sector overall and we have benefited from that trend but there are some interesting narratives emerging behind this increase.
“Perhaps the most notable is that at larger dealers, especially car supermarkets, we are seeing a faster churn of stock.
"This is happening because high trade prices are prompting dealers to sell more units in a shorter time, leading to more warranty sales resulting from the standard cover provided with every car and van.
“Another important reason for the increase has simply been that the network has grown – we have added 80 members so far this year – while we have also introduced several successful initiatives designed to help all of our dealers to increase warranty penetration.
“Finally, we are seeing consumers looking for greater protection as a result of economic uncertainty. This tends to lead to used vehicle buyers seeking longer and more comprehensive warranties.”
Kent said that a large amount of effort had gone into supporting the RAC Dealer Network with the right warranties for the 2018 market alongside enhanced training and marketing support.
“We have created products such as our Platinum Plus that are a response to greater car buyer demand for more comprehensive warranties and have backed up these developments with the marketing resources needed to really drive higher sales," he said.
“All of this is underlined, of course, by the strength of the RAC brand, which continues to be a major differentiator and key advantage in this sector. In a market where there are no brands with real consumer recognition, seeing the RAC name on a warranty has genuine value.”