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
AmTrust Financial Services, the parent company of Warrantech, announced its third quarter financial earnings results this week. Once again the company issued extremely strong financial results, both in top line revenue/premium growth as well as bottom-line profitability.
This is the second quarter in which AmTrust Financial generated more than $1 billion in gross written premium, up 45.8%. Year-to-date gross written premium for 2013 now stands at $3.06 billion, up 50.5% over the YTD 2012 total.
Specialty Risk and Extended Warranty were again listed among the largest premium generators. This speaks volumes about Warrantech’s contribution to the overall strength of AmTrust Financial and is a testament to the hard work of our retailer/dealer network. That partnership and the valuable contributions put forth by our dedicated workforce are a direct result of these noteworthy revenue and profitability earnings totals.
Third Quarter 2013 Financial Highlights
- Gross written premium of $1.07 billion, up 45.8%, and net earned premium of $613.9 million, up 58.4% from the third quarter 2012
- Operating diluted EPS of $0.83 compared to $0.64 in the third quarter 2012
- Annualized operating return on common equity of 21.0% and annualized return on common equity of 18.8%
- Service and fee income of $90.0 million, up 101.9% from the third quarter 2012
- Operating earnings of $65.1 million compared to $48.8 million from the third quarter 2012
- Net income available to common stockholders of $58.2 million compared to $43.2 million in the third quarter 2012
- Diluted EPS of $0.74 compared with $0.56 in the third quarter 2012
- Combined ratio of 89.6% compared to 90.2% in the third quarter 2012
To view AmTrust Financial Services’ full third quarter earnings release, visit the Investor Relations section at www.amtrustgroup.com or click on the following link: http://ir.amtrustgroup.com/releasedetail.cfm?ReleaseID=804320
Filed Under: AmTrust, and, Extended, Financial, Risk, Specialty, Warrantech, Warranty