Extended Warranty for used Vehicles
Let’s understand it straight!
Suppose, A consumer buys a vehicle because she believes it will last forever. She wants to be safe when she drives her car. A customer doesn’t buy a product simply because he needs it; he buys it because he likes it.
But how do we ensure that our products continue to perform well after we ship them out? We extend the warranty period, right? That way, customers receive an extra two years of protection.
Extending warranties can help us increase customer retention rates by ensuring that our products aren’t damaged during delivery. Customers appreciate having an extended warranty for used vehicles, as it helps them save money and gives them peace of mind when they drive away.
It’s important to note that there are pros and cons to extending the warranty period for used vehicles. For instance, if a buyer extends his warranty, he might pay more service costs. However, consumers generally consider this cost worthwhile because they save more money in the long run.
As a result, consumers often opt to purchase secondhand cars with more extended warranties rather than new ones. In addition, when a dealer offers an extended warranty for a used vehicle, they can potentially make more money. This is mainly due to the lower price tag these vehicles carry. Because dealerships charge parking services daily, there’s less overhead involved when selling used vehicles without extended warranties.
The bottom line is that extending warranties for used vehicles makes sense. After all, most of the time, vehicles remain in excellent condition. Additionally, dealers can benefit financially from offering such a policy.
More about Extended Warranties
Extended warranties are excellent for consumers because they help them budget money effectively and ensure they do not spend more than necessary when buying a vehicle. As per statistics, an average consumer buys 3-4 vehicles in their lifetime and spends approximately $10,000-$15,000 on each. However, these figures may vary depending on geographical location, economic condition, etc. So, extended warranties ensure that consumers do not fall prey to a deal that seems too good to be accurate and thus lose out on future savings.
Since an average car owner spends considerable time driving, they also want to get maximum mileage out of the vehicle. Suppose a customer has already paid a lot of cash for the vehicle and cannot afford any mechanical issues. In that case, they tend to put off servicing the vehicle, which results in a loss of fuel efficiency and ultimately leads to higher costs in the long run. Hence, extended warranties are essential in ensuring that customers buy quality products without compromising product quality.
The powertrain warranty is the most common type of extended warranty offered by automobile manufacturers. This warranty covers repair, maintenance, replacement and parts related to the battery charging systems, starter motor, transmission components, drive shafts, etc. These coverages are usually provided under a two-year or three-year plan. Apart from this, there are various other types of extended warranties offered by auto companies, including:
• Power train coverage – Under this coverage, carmakers protect against problems with brakes, steering, suspension, electrical systems, cooling systems, engines, transmissions, exhaust systems, windshield wipers, and tires. Some companies offer extended warranty plans for parts that fail after 30 days (or six months), while others extend the coverage to 180 days, one year, two years, five years, ten years, 15 years, 20 years, 25 years or 50 years.
• Roadside assistance program – This insurance protects repairs made during service intervals and roadside assistance services. For example, if a driver suffers a flat tire during a trip, they can call the company representative stationed at a toll-free number, and the representative will come to fix the problem.
• Service contract – With this coverage, drivers pay monthly fees and receive unlimited visits to the dealer for scheduled service and maintenance. This coverage includes oil changes, air filters, spark plugs, brake pads, shocks, belts, hoses, water pumps, timing belt replacements, wheel alignment, radiator replacements, coolant flush, tune-ups, and much more. This plan is similar to a complete ownership plan since drivers do not own the vehicle but rent it weekly.
• Security plan – Under this plan, drivers receive added security and peace of mind against theft. Car makers offer an anti-theft device called keyless ignition that prevents thieves from stealing cars. In addition, they offer immobiliser devices that prevent the car from starting unless a proper code is entered.
• Loaner program – This insurance helps owners keep their car if they cannot return home due to roadblocks or traffic jams. Once the car is returned to its rightful owner, the former owner receives a loaner car for temporary use.
What are the advantages of Extended Warranties for used Vehicles?
A warranty is an assurance that a product manufacturer offers to its customers regarding the quality and performance of its products. In return, customers pay a fee to extend the warranty beyond the standard period.
It really depends on how much time and money you are prepared to spend on a vehicle. Used car buyers typically require extended warranties because they do not want to waste any more money on repairs.
As you might imagine, consumers find these types of policies appealing because they are relatively inexpensive compared to purchasing a new car. However, there are drawbacks to extending the coverage duration.
For example, extended warranties may cover such items as parts and labour costs, but exclude damages caused by accidents. Additionally, some companies may charge customers a premium fee in order to provide extended protection. But since extended warranties do not come cheap, finding a company offering affordable options is important.
In terms of benefits, extended warranties are convenient for consumers, allowing them to avoid paying repair bills without sacrificing safety. For example, most motor vehicles include basic warranties which protect them against defects.
However, extended warranties can help protect consumers from costly repairs. These policies also guarantee the quality of a product during its life cycle, ensuring that it operates properly.
Finally, extended warranties are beneficial because they encourage consumers to purchase better-quality products. This helps manufacturers improve the overall quality of products while improving consumer satisfaction.
So whether you are thinking about purchasing a new or used vehicle, consider the benefits of extended warranties to ensure that you are making the best choice for yourself and your family.