Warranties to offer your valued customers

One of the main priorities for you as a car dealer is to ensure that your customers are happy and fully satisfied as this will help with repeat business and positive word of mouth.. Offering a car trader warranty can help with this.

Here we are going to look at the types of dealer warranty you can offer, the benefits of car warranties for you and your customers alike and the legal side of things.

So what exactly is a warranty?

Car warranty is a legal agreement that ensures certain costs for repairs and faults are covered within a specific time frame.

Different warranties are issued dependent on the situation of the sale. Manufacturers will issue a manufacturer’s warranty on a brand-new vehicle. Car trader or used car warranties are what you will be offering as a car dealer on good quality second hand cars.

You won’t be looking at offering manufacturers warranty as you are selling second hand cars so lets look at approved used car warranties or car trader warranties.

Approved used car warranties

If you operate as a franchised dealer, you will be aware of the approved used car schemes. This means that the second-hand cars that you are selling have passed checks outlined by the manufacturer according to mileage, number of owners, service history and age.

You can offer approved used car warranty as a car trader which gives a seal of approval from the manufacturer which in turn gives your customer peace of mind. You will have this warranty underwritten and approved by a third-party insurance company and they usually cover for around 12 months.

When offering this warranty, you will need to advise customers to stick to servicing as without the correct checks on the vehicle the warranty can become invalid.

Used car and aftermarket warranties are also offered as car trader warranty and are underwritten by insurance providers. These can be offered by you as car traders however be aware customers can also source these themselves. 

The warranties you offer as a car trader can vary and this is down to the spec of the vehicle you have sold. The terms can be for a few months to a year or so dependent on the condition of the car, This is something to discuss in detail with your customer, Sometimes car trader warranties cover partial repair costs and the customer will be liable to cover the rest. 

The legal bit

A warranty is offered to help with the repair and maintenace costs of used cars it doesn’t affect or overrule statutory rights.

As a car trader you must abide by the law and it is an offence to sell a vehicle that is unroadworthy unless this is clearly stated to the customer and they do not intend to drive on the roads. This is stipulated in the Road Traffic Act 1988.

You also must ensure that the car is described correctly and honestly in accordance to the Consumer Rights Act 2015.

It is important to ensure that your sales are honest and compliant. This also applies to your sales of car trader warranty. You must provide clear, accurate information and you must not omit any important information the consumer is entitled to know.

If you sell your car trader warranty over the phone or online you must also offer a 14 day cooling off period

Benefits of you offering a car trader warranty

•  Reassurance to customers 
•  Prove that you are confidence in your cars as you wouldn’t offer warranty if not sure of your high standards
•  Can mean customers service cars through your garage due to loyalty and confidence
• Commission
• Free warranty can increase the chance of a sale

Downsides of selling trade car warranty 

• Some customers may feel misled when they take warranties and this can damage relationships
• The law is complex so you need to ensure you are fully compliant
• Warranties may feel like a hassle when you are more about the cars than the paperwork

If you are a car trader and want more information on car trader warranties contact our experts today and we can provide you with expert advice and information on our services.