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  • 47% of car owners suffered an incident that caused minor damage to their car last year
  • Almost half of them suffered multiple incidents
  • Just 2% had the damage covered by SMART insurance

Almost half of all car owners experienced an unwanted scratch, scuff, chip or dent to their car over the last year. This is the reality from new research undertaken by AutoProtect Group in November.

Minor damage to cars is one of the most frustrating realities for today’s motorists. The situation is unlikely to improve any time soon. Cars have been getting larger while parking spaces have not stayed in line with this growth, and minor parking dings are only part of the challenge. Stone chips, gritting lorries, hedgerows, misjudged parking, shopping trolleys and embarrassing self-inflicted damage all contribute to unwanted minor damage.

The Impact of Minor Damage on Car Owners

Minor accident damage is not just visually frustrating; it will inevitably impact a car’s second-hand value and, in the case of Personal Contract Purchase and Personal Hire Agreements, can lead to unwelcome wear and tear costs. 37% of consumers were unaware of this risk which can leave them exposed to unexpected financial impact.

The frustration of end of contract fees is not limited only to customers. For dealers, a customer facing unexpected fees at the time of purchasing a new vehicle is hardly welcome. This is where SMART, or cosmetic damage insurance, can help. That is, if the customer was aware and had this cover.

According to AutoProtect’s research, just 2% of customers were able to access SMART cover over the last year. Three times as many paid for damage through their car insurance, with the risks to their no-claims bonuses and any excess fees. Seven times as many paid for the repairs from their own funds, and half did not address the damage at all. While these other options met the cost of repairs, how much more appropriate might SMART insurance have been?

Reflecting on the research findings Mike Edwards, Chief Sales and Marketing Officer at AutoProtect notes;

“To realise the opportunity from SMART insurance, success lies not just in referencing the product, it is in bringing its value to life in the dealership and pricing at a point that represents fair value to the consumer.”

The End of Finance Contract Risk/Opportunity

When selling a car, thinking about the next sale three or four years ahead is not necessarily front and centre of a dealer’s mind. However, Mike is keen to highlight one of the opportunities for dealers successful in promoting SMART insurance lies in a time saving should the customer return the vehicle as a future PX.

Customers purchasing SMART insurance often make several successful claims; they avoid the end-of-agreement wear and tear fees and can gain a part-exchange premium for a vehicle that is in better condition. This PX premium does not worry dealers AutoProtect spoke to because they recognised they were buying a premium part exchange that they could retail more rapidly and with lower preparation costs.

Three Things About SMART Insurance Every Dealer Should Consider

In closing, Mike points to three things he feels every dealer should recognise;

  • From an FCA Consumer Duty care perspective, customers should be introduced to an affordable SMART protection option, and critically, the value of SMART needs to be communicated.
  • SMART can help retention and enable dealers to access a high-quality part-exchange with much of the time-consuming cosmetic repair work done.
  • 19% of buyers would buy SMART insurance if it were offered, and a further 26% would consider buying it.

For more information, email ourpartners@autoprotect.net