Declining confidence is likely to lead to more used car buyers choosing longer and more comprehensive warranties when purchasing their next vehicle, according to The Warranty Group.
Ian Simpson, European managing director of Automotive at The Warranty Group, stated that warranty sales could be countercyclical, and experienced a significant increase during the last recession.
Mr Simpson said: “Consumer confidence has been falling for several months and, following the Brexit decision, took a sudden bump downwards."
“However, our experience – especially during the 2008 credit crunch – is that at times like these, used car customers are looking for greater protection against unexpected motoring costs," he added.
Ian added that many consumers seek more comprehensive warranties when they feel there is less flexibility in their finances, and as such dealers should make sure their warranty offering meets the needs of the consumer.
As consumers become more cautious, it's also important that car dealers make sure they have adequate motor trade insurance and road risks insurance to ensure car buyers are not put off a potential purchase.
Mr Simpson also suggested that a structured warranty upgrade path would be particularly beneficial for anxious consumers, who want the opportunity to select from a choice of warranty products offering comprehensive protection.
According to The Warranty Group, this area of the sales process is now one of the most important, and should be taken seriously by car dealers who don't wish to be affected by the recession. Mr Simpson argued that dealers should ensure they have "the right products, appropriate training, suitable incentivisation, quality marketing materials and easy administration" in place to make sure their sales increase in the wake of the Brexit.
