When it comes to selling new and used cars, warranty sales are not as high as you might think they would be. Most car buyers are happy to take the warranty that is included in the initial purchase because the thought of paying more for an extended warranty on a new car doesn’t seem logical at the time. If customers are better able to see how an extended warranty can keep them safe in the long run and reduce the amount of money they have to pay out of pocket, later on, they may be more willing to put out the money for an extended warranty on day one.
It’s Not Just an Upsell
One of the best ways to get your customers to stop and listen to you about the extended warranty is to remind them that it is not just part of the spiel. In other words, you are not just trying to make more money off them: the warranty can actually help save them money over the life of their vehicle. What’s more, should they choose to trade-in or sell their car down the road, an extended warranty that is still active can add value to their bottom line.
Offer a Variety of Warranties
There are several types of warranties that are available on new and used car sales. Many customers think that a warranty will cover the entire car, but that is not true. It is your job to make sure they understand that there are a number of warranties that they can pick and choose to increase the longevity of their car’s value. Such warranties include vehicle service contracts which can be implemented for year-to-year upgrade and service, tire and wheel warranties, asset protection programs, interior and exterior warranty protection programs and more. Be sure to go through each option that your dealership offers, whether the car is new or used, to maximize the likelihood of increasing warranty sales.
Recognize Trigger Events
There are many opportunities beyond the initial sale of the car to sell a customer an extended warranty. For example, if a customer comes into your shop with a problem, you can offer them a warranty service for future issues. When customers are frustrated with their vehicles, they are more likely to see the value of protection, versus when there is nothing wrong with their vehicle, and they view the warranty as an added expense. Another example would be if a tire wears down before it is supposed to: you can use the opportunity to sell an extended warranty on the new set of tires you offer the customer. Again, they are more likely to see the value in putting out more money now to save themselves the trouble later.
Whether you sell new or used cars, trucks, or SUVs, the importance of a warranty sale cannot be understated. It is beneficial to both you, as the salesperson, and the customer. Making the warranty sale part of the original purchase is a great starting point but be sure to keep an eye out for additional opportunities to speak to your customers in the future so you can sell them a warranty and increase your bottom line.