THE LENGTH of the average used car warranty sold by the RAC Dealer Network has increased by more than a month during the past year.
In February 2018, the typical warranty sold was 12.2 months but the equivalent figure for this year has risen to 13.9 months – a 14% increase.
Sean Kent, RAC sales director at Assurant, which partners the RAC providing and administering warranties across the Dealer Network, said: “This is very much part of an ongoing move towards longer warranties that has been underway in the market for some time.
“It still represents a significant leap over the last year and a probable acceleration of that trend.
“This is being prompted by two different factors – an increase in the standard warranties supplied with used vehicles and also longer warranties being chosen as an option by the customer at the point of sale.”
Kent said that the most common standard warranty across the used car sector had traditionally been three months but there were signs that this was moving towards six months. During 2018, Assurant had recorded a reduction of around 10% in sales of three month cover and a corresponding increase in six months.
“The key driver behind this is that used car retailers are increasingly constructing propositions designed to create a high degree of reassurance for customers – something that is very much prompted by consumer demand – and longer warranties clearly have an important role to play in this process.
“The other element is that customers are choosing, at the point of sale, to increase the standard warranty at additional cost. These people are looking for a higher degree of protection against unexpected motoring expenses, a sentiment that tends to become more prominent in times of economic uncertainty.”
Kent added that the statistics were a strong indicator to dealers of the importance of both providing longer warranties and offering a structured warranty upgrade path.”