Used car buyers are expected to take advantage of increasingly long and more comprehensive warranties as customer confidence stalls in the wake of Brexit, says The Warranty Group.
Ian Simpson, European managing director – Automotive at The Warranty Group, explained that warranty sales could be countercyclical and that, during the last recession, warranty upgrades had increased.
He said: “Consumer confidence has been falling for several months and, following the Brexit decision, took a sudden bump downwards.
“However, our experience – especially during the 2008 credit crunch – is that at times like these, used car customers are looking for greater protection against unexpected motoring costs.
“When consumers feel as though there is less flexibility in their finances, they desire a more comprehensive safety net.”
Ian said that dealers should ensure that their warranty offering fitted this likely need and was properly integrated into their used car sales process.
“Making sure that you offer a structured warranty upgrade path is something that you need to have in place in order to meet probable consumer needs.
“Presenting them with a choice of warranty products that offer longer and more comprehensive protection is, we believe, essential as the effects of Brexit begin to affect the market.
“This element of the sales proposition is something that needs to be taken very seriously by dealers, ensuring that they have the right products, appropriate training, suitable incentivisation, quality marketing materials and easy administration.
“With these in place, sales are very likely to increase.”