The following is an excerpt from an article by Jeff Crider, which appeared in the 2017 Jan./Feb. issue of RVBusiness. The full article can be found at: http://bit.ly/2m9hhac
“The quality of RVs in general has improved, but there are more and more gadgets,” said Joe Suttera, Warrantech’s vice president of specialty products. “From a warranty standpoint, there is certainly a lot more risk than there ever has been when it comes to these units.”
The continued growth of the RV industry in 2017 is good news not only for the nation’s RV manufacturers, aftermarket suppliers and retail dealers, but also for the companies selling extended-service contracts to this emerging wave of RV consumers.
In fact, the extended-service-contract business is booming, companies told RVBusiness, due to this sustained increase in the sales of new and used towable and motorized RVs.
Indeed, the industry is currently experiencing its eighth consecutive year of growth, with wholesale shipments of new RVs expected to increase 4.4% in 2017 to 438,000 units, according to projections by Richard Curtin of the University of Michigan’s Consumer Survey Research Center.
That continuous flow of new- and used-vehicle sales creates huge opportunities for dealers to sell their customers extended-service contracts, the cost of which is typically added to the vehicle loan at the time of purchase.
Regardless of whether their RV is new or used, consumers want to have peace of mind knowing that unexpected repair costs will be covered when their vehicle’s warranty runs out. While manufacturers provide different types of warranties to cover things that can malfunction in the mechanical and living areas of an RV, warranties only last for specific periods of time. Extended-service contracts have been designed to extend warranty protections for additional periods of time with varying levels of coverage and cost.
Extended-service contracts are also available to cover things that are not typically covered by factory warranties such as roadside assistance, tire-and-wheel coverage and paint-and-fabric coverage.
Millennials, in particular, are in tune with the latest innovations in technology and they want it to work.
Extended-service contracts can cover these items after the warranties expire to give consumers peace of mind with their RV purchases, regardless of whether they have new or used vehicles.
Bill Gilman, senior vice president of sales for Warrantech, an AmTrust Financial Company based in Bedford, Texas, said there were more “fit and fitness issues” with RVs back in 2007 when the RV industry was struggling through the Great Recession. The downturn forced many RV manufacturers out of business. But while the quality of today’s RVs has significantly improved from 2007, Warrantech and other extended-service contract providers see plenty of potential risks to cover.
“The quality of RVs in general has improved, but there are more and more gadgets,” said Joe Suttera, Warrantech’s vice president of specialty products. “Now you’re covering 50-inch flat-screen TVs, full walk-in showers. From a warranty standpoint, there is certainly a lot more risk than there ever has been when it comes to these units.”
As one might expect, companies that provide extended-service contracts closely monitor their claims reports so that they can price their contracts accordingly. They also monitor feedback from RV dealers and periodically either update their extended-service contracts to cover new products or develop entirely new types of extended-service contracts for dealers to sell.
Extended-service contract companies offer a variety of educational programs and increasingly sophisticated electronic programs to expedite contract sales and claims processing.
But the time to make the initial pitch to consumers is in the F&I process when they’re purchasing their new or used RVs. That’s when dealers have an opportunity to educate their customers so that they know the differences between warranties and extended-service contracts.
Warrantech Automotive, an AmTrust Group Co.
Product offering: Warrantech markets exclusionary and stated extended-service contracts using the CampersEdge brand name. The company covers motorhomes valued at up to $5000,000 and with up to 100,000 miles. It also covers towable units valued at up to $150,000 and that are up to 15 years old. The company also offers specialty contracts for RV technical assistance; 24/7 roadside assistance; windshield repairs; painting and interior; tire and wheel coverage; as well as key/remote replacement coverage. Warrantech also provides Towbusters coverage with 24-hour emergency towing, roadside assistance, lost key and lockout service, map routing assistance and theft as well as hit-and-run protection. The company also offers guaranteed asset protection (GAP) coverage.
Key contact: Bill Gilman, senior vice president of sales, (210) 788-2555 or firstname.lastname@example.org
Filed Under: AmTrust, CampersEdge, contract, extended, RV, RVBusiness, service, Towbusters
This is one of the most frequently asked questions we receive and one that causes a lot of confusion among customers. Simply put, a warranty is an agreement to make any repairs or replace defective parts during a specified period of time upon purchase – a 90-day warranty, for example. It is provided by the manufacturer or dealer and included in the purchase price of a product. By contrast, a service contract/plan is a separate agreement designed to provide protection after the manufacturer’s warranty expires.
Since a manufacturer’s warranty is only good for a limited time, having additional coverage for important purchases makes a lot of sense. An extended service plan (or vehicle service contract) is a popular choice among customers who want extended coverage on everything from consumer electronics, automobiles, home appliances, boats, power tools and other items they truly value or see as an important long-term investment. For instance, a cash-strapped college student who can’t afford to be without a laptop computer for schoolwork would be smart to invest in a service plan.
A service contract also offers additional benefits that generally aren’t covered under the terms of the manufacturer’s warranty. If you bought a new vehicle, chances are your warranty only covers defects and issues that came about during the design and manufacturing process. With a service contract, you can get supplemental coverage for important systems like the transmission and suspension, and ancillary product protection that covers paint, dent, fabric and windshield repair.
In addition to product and purchase protection, service contracts offer consumers convenience and peace of mind. There have been several articles as of late that all list this as one of the main reasons that people feel that a service contract is well worth the added expense. Should something go wrong with your purchase, you’ll receive immediate assistance. Plus, a service contract can be purchased for just a fraction of what you would normally pay for service repair or, in worst-case scenarios, an entirely new item.
If you do decide that you are interested in extended protection, the best rule of thumb is to always make sure that you carefully compare the service contract with the manufacturer's warranty. Also, consider: 1) the cost of the service contract, 2) the types of coverage it offers, 3) the length of time covered, and 4) how you expect to use your purchase. And if you have any concerns regarding your service agreement or need help with a specific type of coverage, feel free to reach out to us. We’ll be more than happy to help.
Visit our website to view more frequently asked questions from our consumers. Or call us at 800.833.8801.
Filed Under: contract, plan, product, service, vehicle, Warrantech, warranty
Product failures are inevitable. There's no way to avoid them. But when they do happen, the way in which they are handled can have a far greater impact and help turn a bad experience into a positive, long-lasting impression.
Warrantech's overall philosophy regarding service contract programs is vastly different from the competition. Our belief is that service contracts are a means of building trust and loyalty with customers who have experienced a product failure, in addition to increasing profitability for our partners. We view every claim as an opportunity to turn a negative product mishap into an affirmative relationship-building event. An outstanding claim-handling experience is a micromarketing opportunity that yields macro-marketing effects with customers and their circle of influence.
"When products break, customers can lose confidence in the product manufacturer and ultimately the retailer that sold it to them," says Warrantech President and CEO Sean Stapleton. "However, if a rapid and convenient resolution is provided, a higher level of trust and loyalty is often developed with the customer."
We understand the importance that a positive service experience can have for our partners and feel that our employees are extensions of our clients on every call and every transaction. That's why we provide our employees with the knowledge, training, skills, resources and environment needed to provide an exceptional service experience with every customer they interact with.
This approach creates a customer who is not only satisfied with the outcome of the transaction, but a customer who walks away from the experience with a positive outlook on the service contract, Warrantech and, most importantly, our partners. Through continual contact center associate training and monitoring, Warrantech is able to maintain consistency in responses and a positive customer experience.
"We have a unique opportunity to affect customer loyalty," says Stapleton. "Customers recognize and accept that product breakdowns can happen to even the most reliable products. The customer's perception of the product issues are more often driven by our responses. I see service contracts and warranty programs as one of the most powerful loyalty solutions out there. It actually is a game changer."
Visit warrantech.com or give us a call at 800.833.8801 to learn more about how we can benefit you.
Filed Under: contract, customer, experience, positive, service, Warrantech
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
1. Allows customers to prepare for the unexpected and possibly avoid having to pay for any large, unforeseen repair bills.
2. Convenient, efficient and stress free, it takes away anxiety consumers might have should something go wrong with their purchase.
3. Affordable and costs a fraction of what one might typically pay for a new replacement.
4. Saves time as customers no longer have to search for a repair company to fix their damaged merchandise.
5. If a covered product is not repairable, it could be replaced with a new model.
6. Consumer products have become more complex and contain more electronics than they did just 10 years ago, which makes an extended service contract even more valuable to have.
7. As a value-added benefit, numerous service contracts provide toll-free call center support for immediate help with in-home repair and questions about covered products.
8. Some OEM warranties offer limited protection, which can be supplemented with an extended service contract once the warranty expires.
9. Electronic products have become more mobile over the years, which means that they can be more susceptible to accidental damage from typical everyday use.
10. Many service plans offer on-site repair for added convenience.
Visit warrantech.com to learn more about our extended service plans and how they can benefit you.
Filed Under: affordable, consumers, contract, convenience, extended, service