Introducing a two-year warranty probably hasn’t sold us one extra car, but it still worked out to be a very smart move. New car buyers don’t care about warranties much because they never expect to have any trouble. And in many cases they could weld the bonnet shut for the first two or three years and get away with it. That’s why some of the cheap brands are selling so well – buyers simply assume they’re made to the same standards as the big names. They should see some of the factories those cars come from…
My point is that a buyer doesn’t care too much if you give them a one-year warranty or a two-year warranty with a great big hug, all they want is the right price. The people who love the two-year warranty are my customers, the dealers.
See, the big majority of new car buyers still believe that they’ll void the warranty unless they have their car serviced at an authorised dealership, complete with a dealer stamp in the log book. And even many of the owners who know that, legally, the warranty stands no matter who services the car, just as long as it is serviced in accordance with the book, would rather go to a dealership than face an argument if a claim comes up.
Our research has shown that since we introduced the two-year warranty our dealerships have successfully captured the big majority of owners for their servicing for the full two years, or for twice as long as we used to with a one-year warranty. Given that this is one area where dealers actually make money they’re all over us like a rash.

 

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