Used car buyers are opting for significantly longer, more comprehensive levels of warranty cover in 2020, new figures released by the RAC Dealer Network indicate.
Sales have shown that the average length of the company’s RAC-branded Platinum Plus warranty – which offers the highest level of cover among its four product range – has increased dramatically from an average of 9.38 months in 2019 to 15.79 months in 2020, while the lengths of the other levels of cover sold by the RAC Dealer Network have barely changed.
Similarly, sales of Platinum Plus warranty have more than doubled, accounting for 8.2% of total warranty sales across the network to date in 2020 compared to 3.6% in 2019. In contrast, its Silver, Gold and Platinum warranties are all taking lower percentages of the overall share.
Kellie Grocott, RAC director of sales at Assurant, which partners with the RAC in the warranty sector, said: “We don’t have evidence to directly link this to the coronavirus crisis but it is generally accepted in our sector that during times when used car buyers might feel more economically vulnerable, sales of motor warranty products that offer higher levels of cover will tend to increase. There is a desire on the part of consumers for better protection against unexpected motoring costs.
“That is the most likely explanation for what we are seeing now. While the current boom in used car sales clearly suggests that relatively large numbers of buyers are happy to spend money on a used car, they want reassurance that a comprehensive safety net is in place.
“Few members of the RAC Dealer Network offer Platinum Plus as a standard part of their proposition, so the vast majority of these sales will be consumers choosing to actively upgrade to a longer and more comprehensive length of cover, typically from Silver or Gold warranties, at the time of purchase.”
Kellie added that Platinum Plus was introduced by Assurant in 2016 in response to the market’s long-term demands for a further enhanced level of cover from an RAC-branded warranty.
“This is a product that proved to be immediately very popular. However, to underline the acceleration we have seen during the last few months, the average length of Platinum Plus warranty sold increased only from 9.03 months in 2018 to 9.38 in 2019 but has then jumped to 15.79 in 2020.”
RAC Platinum Plus is available on vehicles up to six years old with fewer than 60,000 miles on the clock and cover includes failures caused by carbon build up, wear and tear, and diagnostic work up to one hour.
The RAC Dealer Network consists of 1,350 dealers across the UK who sell RAC branded warranties and a range of other aftersales products delivered and supported by Assurant.
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