This is the second article in a two-part series on selling warranties in the used truck market. Part I may be found HERE.
Though some used truck warranties may be acquired independently by truck owners, warranty providers say during a used truck purchase is the best time for dealers to convince end users of the benefits and value a warranty provides.
A used truck warranty bought during a vehicle purchase is kind of like a security blanket, says Jeff Dobish, CEO, Truck Master Warranty (TMW). It shows the buyer that the dealer stands behind the equipment it sells and is willing to support the equipment into the customer’s period of ownership.
Dobish says some of TMW’s dealer customers include its Certified Pre-Owned 90-day Warranty as standard with all of their used truck sales as a “buy with confidence” feature. These warranties, which cover engines and can be expanded to include other vehicle systems, can then be transitioned to more robust coverage options if the customer is interested, he says.
“We sell hundreds of those each week,” says Dobish.
TrüNorth offers a similar 90-day package, while National Truck Protection (NTP)/Premium 2000 feature six-month coverage packages.
When selling these longer warranties or extensions to a base warranty package — i.e., warranties that are not included in a sale by a dealer — warranty providers note it is incredibly important that used truck sales associates understand the warranty options they have available for their prospective customers and the best time those options should be presented during a sales conversation.
When offering a used truck warranty, timing is everything, says Bruce Geary, senior vice president of sales, NTP/Premium 2000.
“We believe it is a topic that needs to be approached on the front end” of a sales conversation, he says. “Generally speaking, we find too often it is tacked on to the end of a sale and that’s not the right time for it.”
Geary gives the example of a used truck customer entering a dealership with $50,000 to spend. He says a dealer who informs that customer of his warranty options early in the buying process enables the customer to budget the warranty into his purchase, as opposed to a dealer who says nothing until a truck is sold and then is unable to gain traction on a warranty sale.
“We believe it’s a disservice to the buyer to not address it earlier,” says Geary.
And selling warranties are lucrative for dealers as well, Dobish adds. The margin contraction occurring due to oversupply in the used truck market doesn’t impact warranty sales. Properly marketing and promoting warranty plans helps dealers recover earnings no longer available in the retail marketplace.
Fortunately for dealers, today’s third-party warranty providers invest heavily in product training to guide used truck representatives through the warranty sales process. NTP/Premium 2000, TMW and TrüNorth all provide on-site training for new dealer customers and burgeoning online resource libraries to ensure dealers are never far away from key information needed to help an end user customer.
Regarding those online developments, Wade Bontrager, president and CEO, NTP/Premium 2000, acknowledges that while there’s no substitute for quality face-to-face education, NTP/Premium 2000’s online library has proved useful to complement the company’s in-person training curriculum.
“We don’t want to replace the in-person relationship, we want to support it,” he says.
Another training method gaining traction with warranty providers are regularly scheduled webinars and interactive video sales lessons. Dobish says TMW’s weekly Jake Break Show, led by National Training Manager Jacob Warner, has developed a strong following throughout the company’s dealer base thanks to its split focus of providing corporate news and sales tips, as well as its Q&A section where dealer audience members are encouraged to submit questions.
“We want to help our dealers do business,” Dobish says. “We don’t just give them a [fishing] pole; we teach them how to fish.”