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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