RAC Warranty – increasing age – 21st August 2012

Aging car parc creates additional warranty opportunities

Dealers can meet customer desire for security, says RAC Warranty

The aging of the UK car parc caused by two recessions is creating additional demand and opportunities for warranty sales, says RAC Warranty.

Ian Simpson, sales and marketing director at RAC Warranty, said that the rapid slowdown in new car sales that had been in effect for several years meant that the average car was getting older.

He said: “Recent SMMT figures show that the average age of the car parc is now two months older than even just a year ago and this is a continuation of a process that has been underway for some time.

“A substantial number of motorists are driving a car that is one, two or even three years older than the equivalent they owned before the recession of 2008 and this fact makes them aware of the possibility of mechanical and electrical problems occurring.

“What this means, in turn, is that they have a naturally higher interest in safety net products that can provide cost-effective protection against unexpected bills. Dealers that have structured warranty programmes in place are seeing sales penetration continuing to rise.”

Simpson added that while the trend had flattened slightly over the last couple of years, the length and depth of cover specified by used car buyers continued to increase.

He said: “There is ongoing interest among used car buyers in upgrading their warranties, which is something that has been happening since the credit crunch first started to bite.

“As far as possible, motorists – especially those driving older cars – desire the substantial level of reassurance that a high quality, comprehensive warranty can provide.”

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Notes to editors:

About RAC Warranty

RAC Warranty was formed by RAC in partnership with The Warranty Group in 2008.

It offers an extensive group of products. There is a range for FSA compliant dealers - Parts and Labour Cover at Silver, Gold and Platinum levels, GAP Loan Shortfall Insurance, GAP Return to Invoice Insurance, Tyre Insurance, MOT failure Insurance and Lost Keys Insurance. Depending on the level of warranty cover there is no exclusion to the age or mileage of the car as long as it meets minimum purchase price requirements. 

Additionally, a new product called RAC Service and Maintenance, providing excellent value to consumers but not subject to FSA regulation has been developed which will allow a large number of dealers to add significant benefits to their ongoing customer relationships.

About RAC

With around seven million customers, RAC is one of the UK's most progressive motoring organisations, providing services for both private and business motorists.  Whether it's roadside assistance, insurance, vehicle inspections and checks, legal services or up-to-the-minute traffic and travel information - RAC is able to meet drivers’ needs.

RAC is committed to providing the very highest levels of service to its customers and ranked first for customer satisfaction by J.D. Power and Associates' UK Roadside Assistance Study 2006 to 2009. RAC was also the top-named breakdown organisation in the July 2009, January 2010, July 2010 and July 2011 half-yearly UK Customer Satisfaction Index from the Institute of Customer Service.

RAC was awarded a Which? Best Buy for Breakdown Cover in August 2010, and RAC Insurance has also been awarded the Best Overall Vehicle Insurance Provider 2010/11 by themoneypages.com.

RAC's news releases and a selection of images are available from the internet press centre at www.rac.co.uk/press-centre/.

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About The Warranty Group

The Warranty Group is the world’s premier provider of extended service plans, with operations in 33 countries and 2,100 employees. By providing underwriting, claims administration, compliance and marketing expertise, The Warranty Group is a single-source solution for manufacturers, distributors and retailers of consumer goods including autos, homes, consumer electronics and appliances.

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