Article date: 23 May 2008
Tighter high street lending prompted by the "credit crunch" could provide dealers with increased opportunities to sell their own in-house finance products.
RAC Warranty, a new warranty brand offered by the RAC in partnership with The Warranty Group, says that tighter economic conditions are already prompting better penetration of warranty products and that a similar effect could be seen when it comes to used car finance.
Ian Simpson, sales and marketing director, said: "Dealers have had a tougher time selling their own finance products in recent years because the High Street lenders have provided extremely cheap loans to used car buyers.
"However, that is beginning to change. Dealer finance packages are not only looking more attractive from a competitive point of view but the convenience and face to face nature of dealer-based lending could easily gain customers."
Simpson explained that used car dealers were currently rediscovering the benefits of selling a range of financial products to customers as part of the process of selling a used car.
He said: "These are skills that have been a little neglected by some dealers in recent years but many are rediscovering the profits that are to be made from taking a structured approach to selling the financial products that surround a used car.
"Certainly, although used car sales themselves have fallen, the penetration of warranties and other types of insurance have started to rise. There is every reason to expect that a concerted approach to selling dealer finance could bring similar results."
RAC Warranty offers an extensive group of products. There is a range for FSA compliant dealers - Parts and labour cover at silver, gold and platinum levels, GAP loan shortfall insurance, GAP return to invoice insurance, tyre insurance, MOT failure insurance and lost keys insurance. Depending on the level of warranty cover there is no exclusion to the age or mileage of the car as long as it meets minimum purchase price requirements.
Additionally, a new maintenance and repair product providing excellent value to consumers, but not subject to FSA regulation, has been developed which will allow a large number of dealers to add significant benefits to their ongoing customer relationships.
Dealers who want to find out more about RAC Warranty should call 0208 869 7155.
For press enquiries please contact:
Simon Wells at Paperchase PR
Telephone: 01283 711311 / 07768 913 430
Notes to editors:
With around seven million members, RAC is one of the UK's most progressive motoring organizations, providing services for both private and business motorists. Whether it's roadside assistance, windscreen repair and replacement, learning to drive, vehicle inspections and checks, legal and financial services or up-to-the-minute traffic and travel information - RAC is able to meet motorists' needs. RAC incorporates BSM, RAC Auto Windscreens, RAC Direct Insurance and HPI.
Aviva bought RAC in May 2005. The acquisition brings together RAC's powerful brand and customer base with the expertise and leading position in motor insurance of Norwich Union Insurance (part of Aviva). Norwich Union is the UK's largest insurer, insuring one in seven motor vehicles and with a market share of around 15 %. RAC's news releases and a selection of images are available from the internet press centre at www.racnews.co.uk.
About The Warranty Group
The Warranty Group is the world's premier provider of extended service plans, with operations in 33 countries and 2,100 employees. By providing underwriting, claims administration, compliance and marketing expertise, The Warranty Group is a single-source solution for manufacturers, distributors and retailers of consumer goods including autos, homes, consumer electronics and appliances.