Fleet News

Dealers should think about warranties when sourcing stock, says RAC Warranty

Dealers should start to consider which warranty is right for a used car at the moment that they source the vehicle while quality stock remains in short supply, says RAC Warranty.

The company says that a rethink may be needed in how some dealers approach warranties and that different levels of cover may be appropriate for different cars on their forecourt.

Ian Simpson, sales and marketing director, explained: “Traditionally, the vast majority of dealers have chosen a standard level of warranty cover for their entire dealership, such as one year, and applied it to every vehicle on their forecourt.

“However, this approach may need to be rethought in a used car market where good stock remains relatively expensive and in short supply. Many dealers are closer to having to buy the cars that they can get hold of rather than what they would like, and they should be considering the best way to package cars to sell them at the moment that they buy.

“Part of this equation is the warranty. It may be that some ostensibly less attractive vehicles will become a more viable retail proposition if the warranty is extended, or if you can get hold of a good car that is likely to move quickly off the forecourt then the warranty could even be reduced. When the range of stock that you can actually buy varies so much in quality, a one-size-fits-all approach to warranties may no longer be appropriate.”

Simpson added that better technology made the administration of applying different warranties to different vehicles much easier than would have been the case in the past.

He said: “All our administration is carried out through a central online portal and applying different levels of warranty cover to different cars can be done in minutes and is relatively effortless compared to older, paper-based methods.”

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