Becoming an Automotive Business Manager? Check Out This Guide To Extended Warranties!
With modern cars now built to last longer than ever before, today’s buyer often purchases a new car with the intention of keeping it long-term. An extended warranty can help customers pay for costly repairs, which can be required later in a vehicle’s lifecycle.
If you are planning to become an automotive business manager, you might be required to explain all aspects of an extended warrantee agreement to your future customers in terms they will be able to understand easily.
What are some things automotive business managers need to know about extended warranties? Read on to find out.
Understanding Warrantees as an Automotive Business Manager
The average manufacturer warranty on a new car typically lasts for about 3 years or 60,000km. Extended warranties vary in terms of length and what items are covered, and can be offered by both the manufacturer and third party financial institutions.
Modern car buyers are educated consumers and will often shop around for the best deal. If you are an automotive business manager working for a dealership, it is important to make sure that the extended warranty your offer provides a good range of coverage at a competitive price, while also being as profitable as possible for the business.
Automotive Business Managers Recognize the Advantages of a Warrantee
Once you have earned your diploma, your customers will likely ask you about the advantages of purchasing an extended warrantee with their new car. Here are some of the benefits industry pros typically discuss:
- An extended warranty can be tailored to suit a customer’s specific needs. Extra items, like roadside assistance and road hazard coverage, can also be worked into the warranty.
- While modern technology has made cars more reliable, it also makes them more expensive to repair. Extended warranties cover the cost of repairs to both the mechanical and technological systems of a car, which can otherwise be very expensive.
- An F&I manager at a dealership can take care of all the paperwork for an extended warranty when they purchase a car, making it convenient for the customer.
Automotive Business Managers Recognize the Disadvantages of a Warrantee
While an extended warranty has clear advantages, it is worth bearing in mind that it won’t necessarily be the right choice for all of your future customers. Here are some reasons why:
- Extended warranties don’t necessarily cover all repairs and certain items are often excluded from the policy.
- Some extended warranties carry a list of approved repair providers, which can limit the effectiveness of the policy for some drivers. For example, if your customer travels a lot, they might require servicing in another area of the country, where an approved provider isn’t located.
- Extended warranties are only useful to drivers who are planning to keep their cars for a long time, so if your customer is someone who likes to update their car every few years, an extended warranty might not be ideal.
How Automotive Business Training Helps You Handle Customer Concerns
Customers can be very wary of purchasing an extended warranty. Stories of drivers who have been left with hefty repair bills due to substandard coverage have left customers fearful about how effective they really are. With proper automotive business training, you will know how to answer any questions or concerns a customer might have about their policy.
It’s important to remember that the most important advantage of an extended warranty is the peace of mind it provides a customer. Knowing that their car is protected against what might happen in the future will make them feel much more confident about their purchase.