Motor Dealers - Which warranties do you offer?

[bqf]

....and are they a source of revenue, and calm, or massive aggro?

Having decided to start a business as a small-time Johnny come-lately motor dealer (focussing on sub £5,000 vehicles, your Mazda 2, Honda Jazz type stuff) I'd quite like to offer warranties.

Any thoughts on what to consider/to avoid? in this price bracket its cover for <100k <10yr cars I guess.

[Coleman262]

As a mechanic I’ve yet to communicate with a warranty company that talks any sense.

They want to pay a ridiculously low labour rate, don’t pay diagnosis, and even had a company ring euro car parts telling us how much they will pay for the part (even though the one they were quoting was wrong and the actual item was £50more expensive)

A friend of mine used to do car sales at a small dealer and when they sold warranty or finance as an extra they got vouchers for selling them.

Sorry it doesn’t really answer your question,
But check the T&C of the company you use as some of them stipulate and odd service interval that isn’t tied with manufactures guidelines.

[Simpo Two]

bqf said:

Having decided to start a business as a small-time Johnny come-lately motor dealer (focussing on sub £5,000 vehicles, your Mazda 2, Honda Jazz type stuff) I'd quite like to offer warranties.

I thought that dealers had to offer warranties, it's part of the reason they charge retail prices.

Interestingly when my car developed a starting fault a month after purchase, the dealer didn't want me to claim, they wanted to have the car back and fix it themselves. Almost as if it would cost them something if I claimed and got it done locally.

[C. Grimsley]

Coleman262 said:

As a mechanic I’ve yet to communicate with a warranty company that talks any sense.

They want to pay a ridiculously low labour rate, don’t pay diagnosis, and even had a company ring euro car parts telling us how much they will pay for the part (even though the one they were quoting was wrong and the actual item was £50more expensive)

A friend of mine used to do car sales at a small dealer and when they sold warranty or finance as an extra they got vouchers for selling them.

Sorry it doesn’t really answer your question,
But check the T&C of the company you use as some of them stipulate and odd service interval that isn’t tied with manufactures guidelines.

Nail on the head there. I find the aa warranties very good though out the bunch of them

Carl

[Camelot1971]

Simpo Two said:

bqf said:

Having decided to start a business as a small-time Johnny come-lately motor dealer (focussing on sub £5,000 vehicles, your Mazda 2, Honda Jazz type stuff) I'd quite like to offer warranties.

I thought that dealers had to offer warranties, it's part of the reason they charge retail prices.

Interestingly when my car developed a starting fault a month after purchase, the dealer didn't want me to claim, they wanted to have the car back and fix it themselves. Almost as if it would cost them something if I claimed and got it done locally.

Dealers have responsibilities under the Consumer Rights Act, but that is nothing to do with warranties, which could be sold or included in addition to your rights.

[Simpo Two]

Camelot1971 said:

Dealers have responsibilities under the Consumer Rights Act, but that is nothing to do with warranties, which could be sold or included in addition to your rights.

Fair point. Though when a wheel bearing started to fail almost at the end of the first year, they said it was a warranty issue. Luckily I was able to find a local garage who did the work and sorted out the money direct with the warranty company (AA).

[Si1295]

Simpo Two said:

I thought that dealers had to offer warranties, it's part of the reason they charge retail prices.

Interestingly when my car developed a starting fault a month after purchase, the dealer didn't want me to claim, they wanted to have the car back and fix it themselves. Almost as if it would cost them something if I claimed and got it done locally.

In general the T&C's of warranties supplied to/by dealers stipulate that any faults within the first 30 days aren't covered

[Simpo Two]

Si1295 said:

In general the T&C's of warranties supplied to/by dealers stipulate that any faults within the first 30 days aren't covered

Ah, that will be it. Stops dodgy dealers letting faults through for someone else to pay for.

[CLX]

Have a look at the forum section on cardealermagazine.co.uk .

Lots of discussions about warranties in old posts on there.

Looks like quite a few of them put money aside from each sale, so essentially provide their own self-funded warranties.

[Trevor555]

I used to stand my own warranties.

Lawgistics supply warranty booklets with all the legal jargon/terms etc..

You set the claim limit, length of warranty etc..

I packed up in 2008 when third party warranties cost the dealers about £60 each car.

So 250 cars per year would have been £15,000 to pay for warranties. And they wouldn't cover a lot of stuff that'd come back to you anyway.

I think my worst year for warranty payouts from my own pocket was still under £5,000 circa 250 sales.

The only drawback of using your own warranty is that generally it's "return to base"

So in this day, and age, of internet buying, the non local buyers might start arguing about using their local dealers.

If you're just starting out I'd highly recommend you go on one of Lawgistics training courses. You'll learn all about your obligations as a dealer, and ways to protect yourself/do the job properly.

[bqf]

Trevor555 said:

I used to stand my own warranties.

Lawgistics supply warranty booklets with all the legal jargon/terms etc..

You set the claim limit, length of warranty etc..

I packed up in 2008 when third party warranties cost the dealers about £60 each car.

So 250 cars per year would have been £15,000 to pay for warranties. And they wouldn't cover a lot of stuff that'd come back to you anyway.

I think my worst year for warranty payouts from my own pocket was still under £5,000 circa 250 sales.

The only drawback of using your own warranty is that generally it's "return to base"

So in this day, and age, of internet buying, the non local buyers might start arguing about using their local dealers.

If you're just starting out I'd highly recommend you go on one of Lawgistics training courses. You'll learn all about your obligations as a dealer, and ways to protect yourself/do the job properly.

That’s useful advice thanks. I will do that.

[russy01]

Trevor555 said:

I used to stand my own warranties.

Lawgistics supply warranty booklets with all the legal jargon/terms etc..

You set the claim limit, length of warranty etc..

I packed up in 2008 when third party warranties cost the dealers about £60 each car.

So 250 cars per year would have been £15,000 to pay for warranties. And they wouldn't cover a lot of stuff that'd come back to you anyway.

I think my worst year for warranty payouts from my own pocket was still under £5,000 circa 250 sales.

The only drawback of using your own warranty is that generally it's "return to base"

So in this day, and age, of internet buying, the non local buyers might start arguing about using their local dealers.

If you're just starting out I'd highly recommend you go on one of Lawgistics training courses. You'll learn all about your obligations as a dealer, and ways to protect yourself/do the job properly.

Despite it costing you less, I’d see very little value in a warranty provided by a small auto dealer. I’d assume (possibly incorrectly) that you’d have a way to wiggle out of big claims no different than a 3rd party.

Whist many of the 3rd warranties are tosh I’d probably rather value this more? I’m sure many others would imagine a warranty company with Quentin Wilson on the cover more valuable than yours?

Thus, are the costs you’ve saved actual savings? Or would you have sold more cars offering a warranty that to many people had more weight around it?

I have no understanding of your offering or the value of cars you’re selling, but unless very well prepared and documented I’d struggle to see value in a homemade warranty.

[Trevor555]

russy01 said:

Trevor555 said:

I used to stand my own warranties.

Lawgistics supply warranty booklets with all the legal jargon/terms etc..

You set the claim limit, length of warranty etc..

I packed up in 2008 when third party warranties cost the dealers about £60 each car.

So 250 cars per year would have been £15,000 to pay for warranties. And they wouldn't cover a lot of stuff that'd come back to you anyway.

I think my worst year for warranty payouts from my own pocket was still under £5,000 circa 250 sales.

The only drawback of using your own warranty is that generally it's "return to base"

So in this day, and age, of internet buying, the non local buyers might start arguing about using their local dealers.

If you're just starting out I'd highly recommend you go on one of Lawgistics training courses. You'll learn all about your obligations as a dealer, and ways to protect yourself/do the job properly.

Despite it costing you less, I’d see very little value in a warranty provided by a small auto dealer. I’d assume (possibly incorrectly) that you’d have a way to wiggle out of big claims no different than a 3rd party.

Whist many of the 3rd warranties are tosh I’d probably rather value this more? I’m sure many others would imagine a warranty company with Quentin Wilson on the cover more valuable than yours?

Thus, are the costs you’ve saved actual savings? Or would you have sold more cars offering a warranty that to many people had more weight around it?

I have no understanding of your offering or the value of cars you’re selling, but unless very well prepared and documented I’d struggle to see value in a homemade warranty.

Hi Russy Lots for me to answer to there, I'll try and keep it short.

I was a bit different to many dealers as I sorted any problems with my cars before sale, so although my after sale warranty payout was low, my pre sale prep costs would have been higher than most dealers.

Back in 2008 I was buying ex lease stuff from Bedford Auction, 3 to 4 years old, some done a few miles. There was actually very little wrong with the cars.

And again, I'll say I was different to many other dealers, I never wriggled out of any claims, didn't feel I needed to.

I got hit very badly by an Astra diesel estate once, but from memory that was the only repair that went over a grand.

But that's back pre 2008..... My friends still in the trade that I buy for nowadays tell me of far more expensive horror stories. I'm so glad I'm not still in retailing.

As for people trusting third party warranties, I don't know how many sales I lost, not many I think. My hit rate for people that actually came to site was very, very high.

If you say you'd trust a third party warranty better than an established dealer saying he'll cover ANY repairs then I'll have to suggest starting a thread to see what others thought.

I never once refused anyone who had a genuine problem. If the battery failed, or they had noisy brakes, oil leaks etc,, I just told them to bring it in and my mechanic just did it. These are things that a third party warranty wouldn't cover.

I guess a dealer selling cheap bangers will have a different approach, they'd have to.

Anyhow, back to nowadays.

I do jobs for four dealer friends now, and none of them use third party warranties. They know the warranty company wont cover most things that are likely to go wrong and the dealer would end up paying anyway.

And to your last comment about the home made warranty.

They weren't home made at all, have a look at Lawgistics website.

Interesting to hear your thoughts as a buyer though regarding warranties. Have you managed to claim on any third party warranties?

The last time I tried to as a buyer the dealer told me to wait 14 days otherwise they wouldn't pay.

[Jamescrs]

As a purchaser I bought a Sest Leon which was maybe 4 years old at the time and circa 30000 miles on it.
Came from an independent dealer with an AA warranty, i wasn't aware of warranty issue of 3rd parties at the time and assumed it would be a good thing.

Anyway the turbo went within the first 3 months of ownership, managed to get it to my local trusted garage for diagnosis and repair, the garage were very helpful but it was at that point I found out how bad 3rd party warranties are, the warranty only covered claims upto £1000 so.i still had to cover some cost, the garage had issues getting them to authorise the claim at all argued over prices of parts, labour rates, anything else they could think to.reduce cost.

When it was all done I still had to pay the bill in full and claim it back via a.cheque from the warranty company.

When a dealer tells me now they give any sort of 3rd party warranty I give it no value whatsoever.