CHANGING WITH THE TIMES, FOR THE TIMES

By Ronda Payne

BELLBOTTOMS, THE PRICE OF BREAD AND HAIRSTYLES AREN’T THE ONLY THINGS that have changed since the 70s. That decade was when the first used car, or extended, warranties were offered to consumers. The need for them and the concept behind providing customers with peace of mind haven’t changed, but the products themselves have gone through a tremendous shift over the decades.

A pandemic the likes of which no one living has ever seen, a shortage in vehicle inventories and a tremendous desire for people to get away created the perfect storm for further change in used car warranty products in this decade. Gerry Cloutier, National Training and Development Manager with People’s Choice Warranty says coverage has improved, claim amounts have changed and the demand for warranties has increased.

“For the buyer, it’s peace of mind,” he says. “No matter how many blogs you read on the internet, the first thing anyone is going to tell you about an extended warranty is peace of mind.”

The dealer becomes the hero in offering the product, but they too gain peace of mind as repairs on the vehicle are covered and there is no bickering or finger-pointing about the state of the vehicle. It makes the customer’s visit to the dealership that much better. Plus, it’s an added profit centre for the dealer. “In all my years, I’ve done every position in the car business and my happiest customers are the ones with the extended warranty because they’re not paying the bill,” he says.

People’s Choice Warranty offers a range of programs to meet customers’ budgets as well as delivering variety in coverage. New offerings also include electric vehicle hybrids as well as electric sports vehicles like motorcycles and skidoos.

“We’re the first program that’s going to have an EV hybrid program,” he says. “It’s comprehensive. It’s just like buying a new car.”

Also like buying a new car, are the high mileage limits, as generous as a new car warranty. There are also warranties without time limits for those who don’t drive as much.

“During the pandemic, people weren’t out driving their cars,” he says. “But they were still covered. That’s a big advantage. So long as they go for their regular service, if they drive 10,000 kms. a year, they will be covered [up to the maximum mileage even if it takes 25 years to get there].”

It’s been said thousands (millions?) of times, that for most people, a vehicle is the second most expensive thing they will ever buy and prices have hit all time records. Buying a house in the 1970s would have set someone back about $50,000, which is about the average price of a new car today. Granted 50 years have passed, but the fact remains that a vehicle is a big investment, prices aren’t coming down and for most individuals a car is essential to work and life.

“It’s not going to go down anytime soon,” says Cloutier of pricing. “The pandemic has changed the pricing. The MSRP's have gone up two or three times.”

Global Warranty has also made changes to its program recently says Joe Korab, vice president of sales and marketing. The company has made changes to address challenges dealerships are seeing as well as those of the end user.

“They’ve gone through a lot in the last three years,” he says of dealerships. “Having to deal with loss of income and personnel leaving the industry, they’ve endured all that then they’re hit with the aftermath, the collateral damage of low inventory, supply issues for parts, loss of new cars and more.”

He says Global Warranty looked at these issues when coming up with solutions for program revisions. The flexibility for dealers is a high point.

“I like to say we have a program for every customer and we have a coverage for every vehicle,” he says. “In a sense, we’re saying that any car out there, we have something for them.”

For example, a 25-year-old Ferrari buyer may have a hard time finding coverage, but Korab says with a powertrain warranty for up to 1,000,000 kilometers on a mechanically-inspected vehicle, it can be covered through Global Warranty. It’s just one more way to cover more cars in a time of limited supply.

“Retailers are selling more out of their comfort zone,” he adds. “It’s what they can sell, what they can get their hands on.”

A dealership unfamiliar with imports may have found themselves selling them because of availability. Or perhaps they started selling diesel-powered trucks despite having not offered them previously.

“We wanted to take that sort of approach, take that way of thinking to the next level,” he says. “We enhanced our diesel protection as one example. We felt with technology changing and demand for certain items that were never covered before, we had to enhance our coverage.”

Because used cars include everything from a car driven off a lot last week to that 25-year-old Ferrari and more, the need to cover what’s coming off the assembly lines today pushed Global to provide more coverage.

“Air suspensions or power spoilers or anything that has to do with sensors or safety equipment, they’re all covered under our coverage,” he says. “A used car dealer is going to want that covered.”

Standalone options are also available with both warranty providers making things like air-conditioning an add on for the used-car buyer who wants a minimal package, but protection on their A/C. These changes in the industry give everyone more choice, which is always a good thing.

Alternatives ensure that the pleasure driver who drives ten kilometers to work each day is covered as well as the person who uses their vehicle for a three-hour daily commute and a quarterly drive to the Maritimes. There is no average used car buyer anymore and now, their warranty can reflect that. ■