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As reported by Automotive News, Volvo is rolling out a lifetime warranty on parts and labor for all vehicles serviced after the factory warranty at any Volvo dealership. Volvo claims that “the lifetime parts and labor warranty is a commitment to both quality vehicles and quality customer relationships” and that “everyone should feel confident that Volvo is here to support our customers throughout the ownership of the vehicle.” This offering includes extra benefits, such as software updates, diagnostics, personal service, alternate transportation and a car wash for free. Volvo has extended this offer to all Volvo vehicles, regardless of age. It will be valid at any Volvo dealership in North America.
With the recent unprecedented number of OEM vehicle recalls, which has caused wide-spread consumer concern about vehicle quality, this move is certain to be welcomed by Volvo owners. The fact that Volvo has required the repair be completed at a Volvo dealership should also be great news for Volvo service departments. This offer applies to vehicles of any age. So, Volvo service departments are likely to see a higher volume of older model Volvos as consumers that previously defected to independents, now return to a Volvo franchise for the peace of mind a lifetime warranty brings.
Volvo dealerships now have a very strong value proposition to offer customers and would be wise to immediately incorporate this into their marketing efforts, just as Volvo undoubtedly will.
Customer loyalty is a quirky beast. When a customer returns outside of warranty, sometimes dealers are forced into an adversarial position, and place blame on the customer. With this new lifetime warranty offer, Volvo dealers should be able to reduce such situations. Or, at the very least, solve them without having to eat repair costs at the risk of poor CSI scores, unfavorable reviews, or backlash on social media by an unhappy customer.
Volvo’s new plan should help build a perception of quality and make servicing a vehicle at a Volvo franchise more attractive to consumers. As a result, Volvo dealers will enjoy less defection after warranties expire. They should also acquire more customers with older vehicles in their service drives – which equates to more sales opportunities, if handled well. Looks like Volvo managed to roll-out a program that will prove to be a win-win-win for the OEM, the franchised dealers and, most importantly, the consumer.