Majority of Vehicle Buyers Saying 'No' to Extended Automotive Warranties, Survey Finds

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Majority of Vehicle Buyers Saying ‘No’ to Extended Automotive Warranties, Survey Finds

The survey by Pegasystems reveals a disconnect between appreciating the importance of an extended warranty and actually purchasing one.

Counterman Staff
By Counterman Staff
Published:

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A new survey indicates the majority of drivers (63 percent) don’t have active extended warranties for their vehicles.

The survey by Pegasystems reveals a disconnect between appreciating the importance of an extended warranty and actually purchasing one. Sixty percent of survey respondents said they believe warranties provide value, while 62 percent of consumers with active warranties reported benefitting from them within the past year.

According to the survey results, the biggest barriers to consumers purchasing a warranty are: cost (35 percent); not thinking they need one (32 percent); and lack of availability at the time of purchase (29 percent).

Nearly half of those surveyed (48 percent) indicated they only somewhat understand their existing manufacturer’s warranty, and 7 percent say they don’t understand it at all.

The survey points to generational differences in vehicle buyers’ opinions on extended warranties.

Younger consumers are the primary buyers: Fifty-four percent of 16- to 24-year-olds have an extended warranty, while only 25 percent of those 55 and up have an extended warranty, according to the survey results.

Generational differences also surfaced when respondents were asked how well they understand their existing manufacturer’s warranties. Nearly 40 percent of 16- to 24-year-olds said “very well,” while only 22 percent of those 65 and older said the same.

“When it comes to aftermarket owner and user experiences, there is an urgency for auto manufacturers, their captive finance divisions and dealer partners to intelligently orchestrate the fragmented channels, processes, decisions and data necessary to cultivate more loyal customers – whether it’s helping consumers with extended-warranty purchases or providing more seamlessly connected ownership and user experiences,” said Steven Silver, vice president, industry market leader – manufacturing, Pegasystems. “By understanding buyers’ experiences on a deeper level, the industry can provide more personalized recommendations and effortless interactions that protect customers’ automotive purchases long-term, as well as better experiences every time consumers use their vehicles and dealers service them.”

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Customer Service: How It’s Done

Customer service should be your number one priority, and it all starts with the greeting.

Eric Garbe
By Eric Garbe
Eric Garbe is a graduate of Columbus State Community College with a degree in Automotive Maintenance Technology. He has extensive independent and dealership field experience as a technician and shop owner and is an ASE Certified Master Technician and former Adjunct Automotive Professor. He has been professionally writing automotive technical articles and documents for many years and in his free time enjoys restoring old cars and creating custom interiors and upholstery.
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This is always an important topic to discuss, because I consider excellent customer service one of the most important tools you can have to earn trust, respect and repeat business from the customers that come through your door. Whether that customer is do-it-yourselfer from across town or the professional repair shop across the street, your business depends on a solid relationship.It’s a subject that I am passionate about, and it’s one that many people are losing touch with. Whether you are communicating to someone in person, on the phone or using some type of social media, good customer service and bad can both exist. You can’t afford the latter, so this is the first in a series of topics which can and should be shared from the front of the shop to the back. No matter which role you hold, you represent the shop and yourself. Customer service should be your number one priority.First on the list is the greeting. From the second a customer walks in the door, they need to know you appreciate them coming in and how important they are to your business. First impressions are everything and here’s the correct way to do it each and every time: look them directly in the eye, smile and say hello!Of course, you can say “Good morning” or “Welcome to Joe’s Autocare,” but it should be a formal greeting and the most important thing is that you have smiled, looked them in the eye and recognized that they have walked through the door.You should always retain a formal greeting until you are on a first-name basis with a customer. Only once you have established that level of relationship is it OK to use the less formal greeting of “Hi,” followed by the person’s name.This greeting does more than just indicate respect and appreciation for someone walking through the door. Most likely there are customers both new and old who are in earshot of your conversation. For newer customers, this continues to build rapport and reinforce their positive view of your shop; they see that you demonstrate respect and treat everyone in the same manner. For repeat customers, even ones that have been coming for years, the greeting is important because the way you treat them is the reason they continue to come.And when a long-time customer comes in and you greet them with “Hi [First Name],” this indicates your appreciation for them and that you’re glad to see them as a person, more than just a customer. New customers that witness this will see that your repeat customers are comfortable enough to be on a first-name basis, another indication of the trust they have in you.

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