Warranty sales 21.4% up on 2019 in post-lockdown bounce back

Car warranty sales for the last six weeks were 21.4% up by volume on the same period in 2019 within the RAC Dealer Network, new figures show.

Sean Kent, RAC director of sales at Assurant, which partners with the RAC in the aftersales sector, said the business generated from the network’s 1,500 retailers now almost exactly match pre-lockdown levels seen in February and March.

He said: “We have seen a dramatic bounce back since used car and van sales resumed at the beginning of June and there are no signs of it abating yet.

“2020 was already proving to be a record year for warranty sales across the network before the coronavirus crisis took hold and the resumption of momentum that we have seen over the last few weeks has been little short of astonishing considering the circumstances.”

Feedback from across dealers who were members of the network revealed that buyers were keen to re-enter the market but were also looking for a ‘very strong used car and van proposition’, said Kent.

He added: “The psychology of the moment is interesting. There are clearly relatively large numbers of people who are keen to buy, but they are notably more cautious about their purchase than before lockdown.

“We are seeing an increased emphasis on the proposition being offered and it is noticeable that, for example, an ongoing trend to offer six months of standard warranty rather than three appears to have accelerated.”

Fords of Winsford is the latest business to join the RAC Dealer Network, the Dealer Network has a target of achieving 170 new customers in 2020, having recruited 358 in 2019. 

Extensive time and effort had been expended during lockdown to help members of the RAC Dealer Network ensure they had entered the ‘new normal’ in the right shape to maximise sales – and that dealers had continued to join the network, said Kent.

Kent said more sales are being completed entirely online and it is important to help dealers maximise the impact of the RAC brand.

Recent research from the RAC Dealer Network found that a little more than a third (37%) of buyers travelled more than 20 miles to buy a car prior to the Coronaviurs pandemic.

However, the need to socially distance due to the outbreak has led to a significant increase in online shopping across the spectrum. 

The RAC Dealer Network provided methods including a series of e-workshops, advice from our account management staff, new point of sale material and RAC digital assets designed to be used on websites, e-mails and social media.

He said: “Customers know that the RAC would only allow its name to be applied to a dependable and trustworthy retailer, and our pre-lockdown research showed that more than two out of three car and van buyers felt more confident thanks to its presence.”