Affordability is expected to grow in importance during 2019 when it comes to warranties and other Value Added Products (VAPs), according to Assurant, which partners with the the RAC Dealer Network in this sector.
Increasing demand is being seen for these items from used car buyers but ensuring they fit within personal budgets is essential, said Sean Kent, head of account management at Assurant.
He explained: “It is well-recognised in the used car market that in times when consumers feel their finances are under pressure, they seek out products that provide them with protection from unexpected costs.
“As the year progresses, this situation is likely to continue and it is essential that dealers are able to provide warranties and other VAPs that meet customer needs and are within reach for as many used car buyers as possible.
“The key to enabling these consumers to acquire the level of cover they desire will be very much based around affordability – and we expect to see a greater amount of attention being paid to offering value-added products on an interest-free basis.
“Delivering the product in this way provides a new degree of flexibility for customers, allowing them to pay on a monthly, budgeted basis.”
Sean said that this kind of approach could be used not just for warranties but for Guranteed Asset Protection (GAP) and service plans, too.
“Essentially, what many used car buyers will be seeking in 2019 is something very close to fixed-cost, monthly motoring. They don’t want to feel that they could receive a large bill in the event of an unforeseen incident or even just paying for a major service.
“It is up to dealers and providers of VAPs to create offerings that meet this changing need in a rapidly-moving market.”
Sean added that an interest-free option for customers on all sales of RAC-branded warranties was being made available across the 1,360-strong RAC Dealer Network. Customers would be given the opportunity to pay for their RAC warranty over 10 months of equal payments through direct debit, which is of no extra charge to them, or the selling dealer.
He said: “This is all about supporting our dealers and used car buyers with the right offering for a changing market. When this kind of offer has been made previously, we have certainly found that it has allowed more buyers to access the level of cover that they desire.”
For more information about how Assurant can support your dealership and customers’ automotive product needs, such as RAC warranty and GAP, please visit here.