The benefits to used car retailers and their customers of switching from a three to six month standard warranty with every sale are being highlighted by a new campaign held across the over 1,300-strong RAC Dealer Network.

The latest data from Assurant, which partners with the RAC in the warranty and aftersales sector, shows there is already an established trend towards longer warranties. Now, around half of car retailers provide a six month warranty, compared to three in ten in 2016. The same research also indicates that four out of five consumers expect a minimum of six months cover.

Kellie Grocott, RAC director of sales at Assurant, said: “There are three main reasons to be offering a six month warranty as standard. Firstly, our research indicates that it is in line with consumer expectations and shows a high degree of confidence in the car being sold.

“Secondly, it aligns the warranty with The Consumer Rights Act where, if a fault in a used car comes to light after 30 days but before six months, the consumer is entitled to a repair, replacement or refund. A six month warranty can protect the dealer from unforeseen costs in these circumstances.

“Lastly, our data shows that the average claim frequency is significantly higher for six-month warranties than three, which is repair work that the dealership can capture for their workshops and then reclaim. This longer term relationship also increases the number of potential customer touchpoints, building the potential for retention.”

A “Make the Switch from Three to Six” campaign is being trialled across approximately 100 dealers, with RAC Dealer Network account managers in touch with them in the coming weeks to discuss the initiative.

Grocott said: “We’re providing a marketing toolkit that will help these dealers promote the advantages of a six month standard warranty as part of their proposition and we are sure they will soon see the benefits to their businesses.

“The cost of a six month warranty rather than three for the average dealer is only a matter of a few pounds and the advantages far outweigh the cost.

“There is also a strong argument that dealers still offering three month warranties are being left behind by the market. We already have relatively large numbers of dealers who have moved on to 12 months, which is very popular with consumers.”

Research source: “Perceptions of Extended Warranties”, Harris Interactive on behalf of Assurant.

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About the RAC

The RAC provides complete peace of mind to 12m UK private and business drivers, whatever their motoring needs. Its services include:

For more information about the RAC, visit the RAC website.

About Assurant
Assurant, Inc. (NYSE: AIZ) is a leading global provider of lifestyle and housing solutions that support, protect and connect major consumer purchases. Anticipating the evolving needs of consumers, Assurant partners with the world’s leading brands to develop innovative products and services and to deliver an enhanced customer experience. A Fortune 500 company with a presence in 21 countries, Assurant offers mobile device solutions; extended service contracts; vehicle protection services; pre-funded funeral insurance; renters insurance; lender-placed insurance products; and other speciality products. The Assurant Foundation strengthens communities by supporting charitable partners that help protect where people live and can thrive, connect with local resources, inspire inclusion and prepare leaders of the future.

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