Why are extended warranties needed?
With the current trend in financing and ownership, most customers will own, or even lease vehicles for a few years past the original manufacturer’s warranty expiration date. They know that no matter how comprehensive a manufacturer’s warranty is, eventually they will be responsible for the cost of vehicle repair. Many customers see the need and the benefits in being covered by a manufacturer-quality type of coverage going beyond what the manufacturer originally offers.
Are dealerships really benefiting from selling extended warranties?
Selling extended warranties in a dealership has to be seen as a way to help all departments of the dealership, not simply the F&I office at the closing of the sale.
By selling an extended warranty the F&I office will help the dealership increase its profit from the sale of the vehicle. But the benefits for dealerships do not stop there. The service department, parts department and ultimately the sales department will benefit from a quality extended warranty offering.
As customers naturally tend to bring their car back to the dealership that has sold them the extended warranty, the service department will benefit from the sale of the product by having the customer come back to have most if not all of the scheduled maintenance done at the selling dealership; and will also see this customer when other repairs are required. Most of all, when selling a product tailored to automotive dealerships, the service department will be paid retail rates for parts and labour for all approved repairs, boosting the bottom line.
As the service departments deals professionally with repairs and the customer sees all issues with the car solved in a timely manner, with the warranty kicking-in when required, the customer’s satisfaction stays high and so is this customer’s appreciation of the dealership. When time comes to change vehicle, the dealership has an exponentially higher chance of getting the deal.
What is LGM’s SecureDrive?
SecureDrive is a competitive and value added mechanical breakdown protection product. It is available for new, used, and certified pre-owned vehicles, and can be added to any purchased, financed, or leased vehicle sale. With a variety of distance and time-based term options, the product can be customized to suit any customer’s driving habits and the amount of time they intend on keeping their vehicle.
SecureDrive will improve a dealership’s bottom line by helping the business office and the whole dealership generate more revenue.
Why should a dealership offer this program?
Selling SecureDrive in your dealership virtually guarantees return service and maintenance visits. This is because some consumers naturally bring their vehicle back to the location they purchased their extended warranty from for diagnosis, repair, and claims processing. SecureDrive will also increase traffic in your service department allowing you the opportunity to diagnose and repair other, non-covered components.
LGM has been in the Canadian automotive landscape for over 10 years and SecureDrive has been underwritten since 2000 by the Sovereign General Insurance Company, a member company of the Co-operators Group.
For more information about LGM and its suite of F&I products, visit www.lgm.ca or dial 1 800 510 8372.