f&i product consumer insights - the warranty group · f&i product consumer insights what...

© 2017 The Warranty Group, Inc. | www.thewarrantygroup.com

F&I Product Consumer InsightsWhat You May Not Have Known

A Proprietary Study from The Warranty Group

The Warranty Group is continually working to enhance our understanding of US consumer behavior and attitudes related to purchasing automobiles and vehicle service contracts which include extended warranties, pre-paid maintenance, GAP, etc., to drive financial performance and brand loyalty for our clients.

We recently launched a custom survey administered through Ipsos, one of the top 5 global research companies, to uncover consumer attitudes, needs, and shopping behaviors as they relate to automobiles, and the vehicle service contracts purchased to protect them.

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets.

Background

© 2017 The Warranty Group, Inc. | www.thewarrantygroup.com World-class programs. Complete expertise. 2

Methodology

More than 700 US adults ages 18-70, participated in this study who indicated they purchased a new or used car from a dealership within the past 12 months.

Incidence of purchasing a car during a 12-month period is approximately 13% of the adult population in the US (ages 18-70).

This study allowed The Warranty Group to hear the voice of consumers—providing their in-depth perceptions about shopping for automobiles, the vehicle service contract purchase/rejection process, and needs regarding the claims process.


Increased attachment rates though greater consumer understanding

Improved program and financial performance

Objectives

The following information can help provide a variety of benefits to dealer and manufacturer vehicle service contract programs including:

Better informed sales staff

More effective decision making

Enhanced customer service


Automobile Purchasing & Attachment Rates

· The US Car and vehicle SC market seem healthy.· 9% of adults purchased new cars while 4% purchased used cars from dealerships.· Attachment rates are at fairly high levels for new cars with 55% purchasing any type of vehicle SC (Extended Warranty, Pre-Paid

Maintenance, GAP, etc.). In addition, nearly everyone was made aware of opportunity to purchase.

Attachment Question: Did you personally purchase an extended warranty and/or other similar types of plans when you purchased your car?Percentages: (Dark blue) Percent purchasing a car in the past 12 months; (Light blue) Percent purchasing one or more vehicle SCs for that car.

5© 2017 The Warranty Group, Inc. | www.thewarrantygroup.com | Source: US consumer research study conducted by TWG and IPSOS in December, 2015 among past 12 month automobile buyers. Data is property of The Warranty Group, Inc. (TWG) and may not be used in any portion or format without TWG’s prior written consent.

Vehicle Service Contract Buyers are More Satisfied with their Automobile

· Consumers who purchase vehicle SCs express greater satisfaction with their car than non-SC buyers.· New and used vehicle SC buyers are more satisfied than non-SC buyers as they give higher “extremely satisfied” ratings than their

comparable non-SC buyer group.

Question: Overall, how satisfied are you with the car you purchased?Percentages: Percent of vehicle SC Buyers and Non-SC Buyers who are extremely satisfied or very satisfied with the automobile they purchased.


Vehicle Service Contract Buyers are More Loyal to Brand & Dealership

· Consumers who purchase vehicle SCs may have more loyal tendencies than those not purchasing.· New car vehicle SC buyers are more loyal to their car brand and to their dealership than non-SC buyers.

Brand Loyalty Question: Was the car you owned prior to this car the same brand/make or a different brand/make? Dealership Loyalty Question: You indicated that you purchased your car from a dealership, had you ever purchased a car from that same dealership in the past? Percentages: Purchasing the same car brand as last time (left chart) or visiting a dealership they’ve been to before (right chart).


Vehicle Service Contract Attachment Rates Increase with Familiarity

· Consumers who do not feel familiar with vehicle SCs are less likely to have purchased a vehicle SC. · Attachment rates are highly correlated to familiarity.

Familiarity Question: On a scale from 1 to 9, how familiar are you with extended warranties or service plans for cars and how these plans work?Attachment Question: Did you personally purchase an extended warranty and/or other similar types of plans when you purchased your car?Percentage: Percent of new car buyers purchasing one or more vehicle SCs for their car by their level of familiarity with vehicle SCs.


Familiarity with Vehicle Service Contracts

· Vehicle SC buyers are more familiar with vehicle SCs than non-SC buyers. However, there is room for increasing familiarity among both groups.

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Question: On a scale from 1 to 9, how familiar are you with extended warranties or service plans for cars and how these plans work?

© 2017 The Warranty Group, Inc. | www.thewarrantygroup.com | Source: US consumer research study conducted by TWG and IPSOS in December, 2015 among past 12 month automobile buyers. Data is property of The Warranty Group, Inc. (TWG) and may not be used in any portion or format without TWG’s prior written consent.

Vehicle Service Contract Buyers Skew Younger & Have Less Car Buying Experience

· US vehicle SC Buyers emerge with some demographic differences compared with non-SC buyers.· They skew notably younger, live in larger households and have less experience purchasing cars over their lifetime.


Key Take-Aways

• Attachment rates are at fairly high levels for new cars

• Vehicle service contract buyers are more satisfied with their automobile purchase

• Vehicle service contract buyers are more loyal to brand and dealership

• Vehicle service contract attachment rates increase with familiarity

• Vehicle service contract buyers skew younger and have less experience purchasing cars over their lifetime

These are just a few key findings of our research:


We have a great deal more research information and look forward to the opportunity to show you how a successful

vehicle service contract program can positively impact your business.

At The Warranty Group, we drive F&I performance and PVR to strengthen your financial position.

Whether you’re looking for exceptional income development, or more profit to reinvest in inventory, training & development, or capital to expand your business, we can help.

Established in 1964 as Pat Ryan & Associates, we partner with 5 of the top 10 mega-dealers and more than 5,600 dealerships nationwide.

Bottom line, we understand the car business and can make you more profitable.

Why The Warranty Group?


To learn more about our consumer research and see what a half century of industry leadership can do for you, contact:

[email protected]

312-356-3010

www.thewarrantygroup.com/auto-dealerships

Contact Us


f&i product consumer insights - the warranty group · f&i product consumer insights what...

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