Reduced margins on used cars are driving increased dealer interest in getting the most out of added value products, claims Warranty Group.
Damian Tyler (pictured) head of business development at The Warranty Group, says that there has been additional momentum in recent months behind warranties, service plans and GAP insurance.
He said: “Pretty much across the board, increased price competition and higher costs of acquiring stock mean that the margins on used cars continue to be under pressure.
“Smart dealers are therefore looking to make more out of the total sale and one way to do this is to ensure that their added value product portfolio is appealing to used car buyers and being promoted effectively.”
Tyler explained that dealers were taking a fresh look at their added value products - how they were sold, whether staff were correctly trained and how to create interest both in the showroom and online.
“Much of the thinking from dealers is linked to the expectation of a continuing economic slowdown.
"They know that at times such as this, motorists will tend to look to products that provide a safety net against unexpected costs and many added value products do this.
“Anyone who has worked in a dealership through points in time when used car buyers are concerned about the economy knows that the appeal of these kinds of products naturally increases.
"It is about not just increasing profitability but ensuring that you are meeting the needs of customers.”