F&I Management & Training

More independent used car dealers are starting to view warranties as a potential profit opportunity, says RAC Warranty.

The company says that many are starting to introduce structured warranty sales programmes to help them sell longer and more comprehensive cover with used cars.

Ian Simpson, sales and marketing director at RAC Warranty, explained: "Independents are learning that customers are very receptive to the idea of increasing warranty cover at a time when many people remain worried about their jobs and money in general.

"Warranties are a way for these used car buyers to safeguard against the possibility of future unexpected motoring bills - and also, of course, for dealers to increase the profitability of each used car sale.

"We are starting to see more and more independents taking a structured approach to the whole business of warranties. Rather than viewing a standard three month warranty as a cost that needs to be added to a used car before it can be sold, they increasingly perceive it as a starting point for potential additional profits, ensuring that it becomes introduced into the sales process in a disciplined fashion and that results are tracked carefully."

Simpson added that independent garages that had aftersales facilities were also starting to recognise the role that warranties had to play in retaining future aftersales business and repeat car purchasing.

He said: "Independents are starting to think along the same lines as franchise dealers - that capturing future warranty claims is a good way to ensure that your workshops are busy in the future and that keeping the customer coming back builds a relationship that could lead to a repeat used car sale in the future.

"It is all about moving away from a mindset where a used car sale is a single profit opportunity to one where it is the starting point of a long term customer relationship."