RAC Warranty Offer Ex-Fleet Safety Net
RAC Warranty, a new company operated by the RAC in partnership with The Warranty Group, understands that in today’s current financial climate and with more and more four year old ex-fleet cars becoming prevalent on the used car market, often at high prices thanks to general stock shortages, that customers are seeking that extra reassurance.
Ian Simpson, sales and marketing director, explained: “The effects of the recession on the leasing and used car sectors have created a market where a customer may find themselves paying a similar price for a four year old, high mileage ex-fleet car today as they would have for a three year old, 60,000 mile one just 12 months ago.
“In this situation, the feedback that we are receiving from dealers is that the warranty offered with the vehicle is becoming an ever more important part of the deal. The higher mileage especially is making customers wary as is the general condition of some of these vehicles.
“Ultimately, customers are still buying but they are seeking a safety net in the shape of a warranty that they trust and which they believe has a high degree of credibility – and dealers are often responding by providing higher cover within the windscreen price.”
Simpson said that feedback indicated that customers were also frequently opting to extend their warranty even further – either improving the level of cover or increasing the length of the warranty.
He said: “This has been a general recessionary trend. In tough economic times, used car customers are looking for the highest degree of reassurance possible that they will be protected from unexpected motoring expenses.
“However, there are areas of the market where the desire for extra cover seems to be stronger than others, and sales of extended warranties have been especially strong around four year old ex-fleet cars.”
Simpson added that it was difficult to predict whether the four year old ex-lease car would replace its three year old predecessor as one of the mainstays of the used vehicle market.
He said: “It is not yet clear whether the companies that extended their leases have regained the appetite for signing new ones, or whether the four year lease has become the industry standard. Whatever happens, the eventual outcome will have a definite impact on the shape of the used car market for some time to come.”
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