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What dealers need to understand about the warranties they're selling

Car warranties can be a fantastic addition to a sale – a win-win situation for both the car buyer and dealer. It’s important that warranties are well thought through and fool-proof. That also goes for the way that they’re sold. Some dealers struggle to sell car warranties on account of many customers being wary of a scam.

In some cases warranties might indeed sound too good to be true and could seem just a classic way of up-selling. It’s up to the dealer to come across in a knowledgeable and trustworthy fashion, to help customers feel at ease. This article may be a bit old but the customers still remember the scam and the funny thing is that it's not entirely erradicated. Some salesmen still use it so that's why the honest dealers have to be extra transparent when trying to sell warranties. Here are a few things to consider to help prove you’re not a dodgy dealer.

Know your customer

If possible, before they even walk through the door, you need to know what sort of warranty - if any - they can benefit from. Not every buyer of a used vehicle needs an extended warranty, for example. The reasoning is in the word ‘used’, as the quality of parts is likely to be diminished, meaning the need for cover is less. Will the policy cover enough of the repairs to justify the expense? Or are you trying to sell a policy that means nothing to the customer?

Know the warranties

If the car still has time on the clock, then the next step is knowing which warranty to sell. Identify a customer and observe their purchase, then pick a plan that could fit their circumstance and explain to them in simple terms how this could save them money.

Most extended warranties can be put into two categories:

  • Dealer Warranties - offer great longevity, convenience, a friendly face and are often negotiable.
  • Third Party Warranties - often cheaper, not tied to the dealership. Knowing every last detail and filling in every gap they can find will give less ammunition for concern.

For example, if you are aware of a fault in a particular vehicle and sell a warranty that covers these issues, then this will ultimately be appreciated. It’s also important to choose an option that works with your dealership so that you can provide the best service possible.

Know your style

552019b9a35f9ce4abafdf122d4de950.jpg?t=1You need to be professional and you need to avoid being patronizing. These days, buyers are approaching dealerships with more idea of what they want and are better educated in the deals they can get. They’ve done their research, they’ve read consumer reports and they are cautious when it comes to fine print.

If you display printed material or mention warranties on your website, a detailed FAQ can be a good way to show the buyer that you're competent and straightforward. Start as you mean to go on, and treat them as you would want to be treated. This goes too for offering every last bit of assistance that you can.

Train yourself and your staff to be able to explain the warranties in depth and come across naturally competent. Passing on the wrong information to customers could spell disaster as the warranty company would take no responsibility. An easy way to sell a warranty - or indeed, a car - and build a trusting client base is to build a reputation. The easiest way to do this is by word of mouth, so it’s important that sales of both cars and warranties are done professionally and completely.

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