1. Financial Strain
If you feel that having to purchase an entirely new item or making costly repairs would drain your bank account or leave you with a mountain of credit card debt, then you should definitely look into an extended service plan (ESP). It can actually enhance the value of your product as opposed to being a financial burden in the event that something does go wrong. With an extended service plan, you’re essentially transferring risk to the company that sold it to you and trading it in for peace of mind. Regardless of the product’s cost, having a smaller monthly ESP payment instead of an unexpected, large repair bill is a wise investment that can help keep you from breaking the bank.
2. Time Constraint
Another key consideration is time. An extended service plan can help: 1) Take the guesswork out of searching for a quality repair company to fix your damaged merchandise on short notice. 2) Find a replacement product and have it shipped to you in a timely manner if repair is not an option. 3) Provide you with on-site repair in many instances.
In short, a good extended service plan is designed to provide you with immediate assistance. If you are having trouble with a product, you’ll have instant access to an authorized service professional, via a toll-free number, who can diagnose the problem and help you get on with your day – right away.
3. Product Reliability
No matter how well designed a product is, nothing lasts forever. Failure is inevitable. That’s why it’s always a good idea to go online and research the potential shortcomings of the particular product you intend to purchase. Check into the long-term durability of that brand to determine its reliability and what type of coverage would be most beneficial to you.
Also, think about the implications of being without your favorite consumer appliance – whether it’s a refrigerator, television, dishwasher, washer/dryer or other durable good. If you feel that being without this specific item would be a burden to you, then an extended service plan serves as a good complement.
4. Accidents Happen
Consumer electronics have become more mobile over the years, which means that they are more susceptible to accidental damage from typical everyday use. Keep your habits and behaviors in mind as to how you use products like these. If you travel a lot or are constantly on the go, then your mobile devices could be at greater risk. And if you depend on a smartphone, computer tablet or laptop for important things like work or college assignments, just imagine how difficult it would be if you didn’t have coverage and had to spend a lengthy amount of time without them.
5. Long-Term Investment
It is human nature that we would treat a car that we intend to purchase and drive for a long period of time differently than we would a car with a short-term lease. If it belongs to us we’re more likely to keep it cleaner, buy higher-grade gasoline and go out of our way to avoid bad roads. The same can be said of any product. If you view something as a long-term investment more than simply a fleeting purchase, you’ll want to keep it operating at its very best for as long as possible.
An extended service plan is a must-have in situations like this and can be useful for items that depend on steadfast service. As always, be sure to read the coverage terms of your extended service plan to be certain that it meets your needs, and make sure that it includes a reliable repair plan to help keep your most important appliances working longer and to the best of their abilities.
For more information regarding extended service plans, visit warrantech.com or contact us today at 800.833.8801.
Filed Under: consumer, electronics, extended, finance, investments, plan, reliability, service, time
Having a vehicle service contract (VSC) gives you added peace of mind while taking away the risk of an expensive and unexpected repair bill. But as vehicle design starts to evolve even further, the appeal of a VSC continues to change as well.
More dealerships are finding that consumers are less worried about mechanical failure and are more focused on in-vehicle technology. That’s not to say that there’s not a need for component coverage on items such as the transmission and engine — far from it. It’s just that as cars are being built with more electronics and connectivity features, items like navigation systems and Bluetooth technology are becoming more of a focus for customers interested in a VSC.
In a 2014 study by the Consumer Electronics Association (CEA), in-vehicle technology was cited as an important factor when purchasing a new vehicle for more than half (59 percent) of U.S. drivers. The same study also found that two in five consumers (42 percent) stated that they intended to buy an in-vehicle technology device or accessory within a year.
Fast forwarding to the present day, another study was just released that helps provide even further insight into VSC/automotive purchasing habits. According to a recent DealerRater survey question supplied by Automotive News, 30 percent of consumers said that they bought a service contract on their most recent vehicle purchase. Taking a deeper dive, here are some additional findings from the survey:
• 26 percent of new-vehicle buyers purchased service contracts
• 40 percent of used-vehicle buyers purchased service contracts
• 33 percent of consumers who visited a dealership for service bought a service contract
• 21 percent of all respondents purchased GAP protection, which was the next best-selling F&I product
• 12 percent or less of all respondents purchased F&I products such as tire and wheel, prepaid maintenance, paint protection and coverage for alarm systems
Advanced features and safety systems cost more to replace if they malfunction, so a VSC makes good sense if your vehicle features the latest state-of-the-art technology. And even if it doesn’t, a service contract is still a great option for covering the major components of your vehicle. Plus, a VSC gives your vehicle greater resale value. If you plan on selling your car or truck after a few years, keep in mind that you can get a higher price for it if it’s backed by a VSC.
So, yes, car design has evolved and will continue to do so. But on the flipside, so have VSCs. Service plans have become more flexible, which allows every consumer to find the perfect fit for their budget and the way they drive. And this key advantage in how VSCs are designed allows consumers to stay out of the red and on the road a lot longer.
Filed Under: automotive, consumer, contract, resale, service, technology, value, vehicle, VSC
In today’s highly competitive retail marketplace, providing valuable add-on services is essential to increasing profitability and enhancing customer satisfaction. But, determining the value of an extended service plan (ESP) is often in the eye of the beholder. For some consumers, it’s seen as a security blanket, knowing their investment is protected long after the manufacturer's warranty runs out. Others, however, see warranty plans as another line item on their receipt that they can’t justify during challenging economic times. As retailers look to bolster profit margins in times of flat sales, it’s important to drive home the benefits ESPs offer consumers above and beyond the warranty terms and conditions.
One Size Doesn’t Fit All
In light of slumping retail sales, extended warranty programs have become an essential and profitable value-add for retailers. Extended warranty plans such as product replacement programs, extended service plans, on-site service and comprehensive service programs offer distinctly different options to help customize a plan that best suits the consumer. By knowing the specifics, your staff will be better equipped to capitalize on the value these plans offer.
The only way to have valuable dialogue with the consumer is to have a well-represented team selling products and the services associated with them. Generally, there are four factors that go through the consumer’s mind when considering an ESP:
1. Value of item being purchased
2. Price of extended warranty
3. Length of manufacturer's warranty
4. Length of extended warranty and date coverage begins
Through various sales tactics and techniques, your sales team can re-engage the consumer beyond the normal talking points by highlighting the services your warranty provider offers that often get overlooked:
1. Save time and money — If a product fails during the extended term, the consumer will not have to deal with repair hassles or bills because either a replacement (delivered same day or next day) or repair of the product will be handled by the provider. Locating an approved service center by the consumer’s ZIP Code is also a valuable time savings.
2. Ongoing support — For ongoing product support or questions about a plan, consumers can call a dedicated toll-free ESP hotline for inquiries or other details during the term of their extended warranty.
3. Trusted partner — The extended warranty plan is attached to the consumer, not the store. Since the rate of foreclosures and bankruptcies are up in today’s economy, it never hurts to point out the ownership aspect of the ESP.
The Bottom Line
The world of consumer electronics is cut throat — profit margins are slim, and prices have to remain competitive or stores lose business. For retailers, finding new ways to increase profits are not easy to come by. But, ESPs cost virtually nothing to market, take up little to no inventory space and are easy to promote. Retail personnel, especially, are in a unique position to sell extended plans to consumers because the transaction takes place live, in-person and at the point of purchase. Timing is definitely part of the sales equation, but selling value to an informed consumer provides better customer service and sought-after profit margins.
Filed Under: consumer, customer, extended, margins, plan, profit, retail, service
The following article by Shara Richter appears in the TWICE Guide to Extended Service Contracts, a supplement to the April 7 issue of TWICE magazine. For more information on the stories in that issue, be sure to visit www.twice.com.
The concept, image, definition and demographic of the extended service warranty have all changed substantially over the years.
Extended service warranties were meant to be insurance contracts that retailers sold to consumers to cover repairs on products that were either not covered by the manufacturer's warranty or that went into effect after the manufacturer's warranty expired. In theory this was and is still a great idea that should have protected consumers and increased profits for retailers. In the past however, the warranty business gained a mixed reputation for leaving some consumers holding the bag. Consumers were less likely to buy warranties on electronics and retailers were losing out on all the potential profits. But that is old news. Today, consumers and retailers alike are opting in on service warranties for a variety of reasons and benefits.
Today's extended warranty service plans are an upgrade from the past and offer better services for customers — whether it be in customer service, product repairs or product replacements. Shawn DuBravac, CEA's chief economist and senior director of research says "The whole service environment has changed. It's no longer just about increasing margins, but also improving the customer experience. You want your customers to be happy and to come back," he recently told TWICE.
This expanding definition may be raising the bar on consumer expectations of their warranty coverage. Some service contracts now include such perks as 24-hour/seven days a week technical support. Consumers can tap online resources that are at once intuitive and automated and give technicians remote access for real-time troubleshooting and fixes. Plus some contracts offer protection for previously uncovered circumstances such as accidental damage and typically exempt services such as installation, says the Consumer Electronics Association (CEA).
These consumer-friendly upgrades appeal to a key CE demographic, millennials. The young consumers are dependent on their mobile devices, and those products have a greater chance of sustaining drops, spills and other accidental damage precisely because of their portability. As a consequence, millennials are more inclined than preceding generations to insure their products with repair and replacement plans. CEA research shows that these consumers are not only open to buying protection plans but want to buy them to protect their most important possession — their mobile devices.
For more information about service contracts and extended warranties from Warrantech, be sure to visit http://www.warrantech.com/partners/consumer-products/extended-service-plans/.
Filed Under: Association, Consumer, devices, Electronics, extended, millennials, mobile, service, TWICE, warranties
More than ever before, car buyers are purchasing vehicle service contracts to help prepare for the unexpected and save money on expensive repairs.
The Service Contract Industry Council (SCIC) estimates that consumers bought more than 10 million vehicle service contracts in 2012 for both new and used vehicles. Those service contracts covered 95 percent of annual claims filed, including repairs necessary due to normal wear and tear, providing coverage above and beyond a traditional manufacturer’s warranty.
An increasingly popular choice due to the rise in car repair costs, the SCIC points out that vehicle service contracts offer value and predictability by protecting the vehicle well after the manufacturer’s warranty expires. A vehicle service contract also offers additional coverage that isn’t offered in the original equipment manufacturer’s warranty.
“The new technologies and complex components in today’s motor vehicles put consumers at greater risk for big out-of-pocket repair costs than ever before,” said Timothy Meenan, SCIC executive director. “Service contracts help consumers better deal with the unexpected, so they don’t have to worry when expensive unforeseen repairs are needed.”
The SCIC adds that today’s vehicles are made up of more than 10,000 components, yet the standard powertrain warranty covers only a fraction of them. The average new car has six to 20 computers that control everything from fuel injection and antilock brakes to airbag deployment. Those systems can be expensive to repair, due to both the high cost of parts and labor costs that can run as high as $250 an hour for specialized repairs on luxury vehicles.
For more consumer tips and information regarding extended warranties and vehicle service contracts, be sure to visit www.go-scic.com.
Additional Benefits of Having a Vehicle Service Contract
- A vehicle service contract covers systems not typically included in the manufacturer’s powertrain warranty, such as air conditioning, heating, power windows, electronics and navigation
- Most service plans pay for the cost of a rental car while your car is in the shop—standard manufacturer’s warranties do not
- When selling a vehicle, service contracts can be transferred to a new owner, which increases its value
- Access to certified auto technicians
- 24/7 customer support and technical assistance
Filed Under: consumer, contract, service, tips, Vehicle