AM Online

AFV owners seek GAP and warranty cover as financial concerns rise

Electric vehicle charging

Demand for GAP insurance quotes and extended warranties for alternative fuel vehicles (AFVs) is rising year-on-year (YoY), data from Intelligent Motoring shows.

The company said it has seen the number of requests for GAP insurance quotes rise by more than 10% since 2018.

June 2022 figures reveal a YoY increase of 3.2%, and the first six months of 2022 saw 86% more quotes than the same period in 2021.

The company said AFV extended warranty quotes now account for 5% of all quotes, rising from less than 2% in the same period in 2018.

Duncan McClure Fisher, chief executive officer (CEO) at Intelligent Motoring, said: “Whilst the reality is that AFVs accounted for less than 2% of the UK’s total vehicle parc by the end of 2021, new vehicles sales continue to accelerate at speed.

“As these cars begin to age and filter through to the three-year-old plus used market – the core market for extended warranties – we can expect to see a similar rise in sales of EV warranties.

“An uplift in demand for GAP insurance and particularly extended warranty, is encouraging, and suggests consumers increasingly recognise the value of add-on ancillary products that safeguard the health and financial integrity of their car purchase.

“Pandemic financial fears, coupled with the rising cost of living, are also likely to have stimulated consumer concerns to protect disposable incomes and avoid unexpected ownership expenses.”

The research follows after it was revealed that the UK's cost-of-living crisis has prompted 63% of car dealers to change the types of used vehicles they stock to prioritise smaller, more affordable products.

Intelligent Motoring data shows that some common repairs come in at up to 400% higher for electric vehicles (EVs) than their combustion engine counterparts.

For example, a coolant pump repair for a BMW i3 – carried out by one of Intelligent Motoring’s registered and approved garages – costs £2,293.99 compared to around £400 at a franchise dealer for the same part on a BMW 3 Series petrol model.

Meanwhile, replacing a single door handle on a Tesla Model S will cost almost £670 – the retractable feature being controlled by an electric motor – compared with repairing a simple door handle on an Audi Q7, which would cost around £245.

Many reports claim AFV owners could see a 30% reduction in their service and maintenance costs if they opt for extended warranty cover.

McClure Fisher added: “Many AFV owners are unaware that the shortfall in technicians qualified to work on EVs, alongside the higher cost of EV parts, is pushing up the repair bill when things go wrong.

“This presents an income opportunity for retailers and garages who are EV-ready as they can help educate drivers on the value of both GAP and warranty cover for their AFV.

“Not only could this save their customers considerable money in the longer-term but also build lasting customer relationships.”

The UK’s new car registrations slumped to their worst June since 1996 after ongoing component supply issues contributed to a 24.3% decline.

Click here for aftersales best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment

Comments

No comments have been made yet.