The following is an excerpt from an article by Jeff Crider, which appeared in the 2017 Jan./Feb. issue of RVBusiness. The full article can be found at: http://bit.ly/2m9hhac
“The quality of RVs in general has improved, but there are more and more gadgets,” said Joe Suttera, Warrantech’s vice president of specialty products. “From a warranty standpoint, there is certainly a lot more risk than there ever has been when it comes to these units.”
The continued growth of the RV industry in 2017 is good news not only for the nation’s RV manufacturers, aftermarket suppliers and retail dealers, but also for the companies selling extended-service contracts to this emerging wave of RV consumers.
In fact, the extended-service-contract business is booming, companies told RVBusiness, due to this sustained increase in the sales of new and used towable and motorized RVs.
Indeed, the industry is currently experiencing its eighth consecutive year of growth, with wholesale shipments of new RVs expected to increase 4.4% in 2017 to 438,000 units, according to projections by Richard Curtin of the University of Michigan’s Consumer Survey Research Center.
That continuous flow of new- and used-vehicle sales creates huge opportunities for dealers to sell their customers extended-service contracts, the cost of which is typically added to the vehicle loan at the time of purchase.
Regardless of whether their RV is new or used, consumers want to have peace of mind knowing that unexpected repair costs will be covered when their vehicle’s warranty runs out. While manufacturers provide different types of warranties to cover things that can malfunction in the mechanical and living areas of an RV, warranties only last for specific periods of time. Extended-service contracts have been designed to extend warranty protections for additional periods of time with varying levels of coverage and cost.
Extended-service contracts are also available to cover things that are not typically covered by factory warranties such as roadside assistance, tire-and-wheel coverage and paint-and-fabric coverage.
Millennials, in particular, are in tune with the latest innovations in technology and they want it to work.
Extended-service contracts can cover these items after the warranties expire to give consumers peace of mind with their RV purchases, regardless of whether they have new or used vehicles.
Bill Gilman, senior vice president of sales for Warrantech, an AmTrust Financial Company based in Bedford, Texas, said there were more “fit and fitness issues” with RVs back in 2007 when the RV industry was struggling through the Great Recession. The downturn forced many RV manufacturers out of business. But while the quality of today’s RVs has significantly improved from 2007, Warrantech and other extended-service contract providers see plenty of potential risks to cover.
“The quality of RVs in general has improved, but there are more and more gadgets,” said Joe Suttera, Warrantech’s vice president of specialty products. “Now you’re covering 50-inch flat-screen TVs, full walk-in showers. From a warranty standpoint, there is certainly a lot more risk than there ever has been when it comes to these units.”
As one might expect, companies that provide extended-service contracts closely monitor their claims reports so that they can price their contracts accordingly. They also monitor feedback from RV dealers and periodically either update their extended-service contracts to cover new products or develop entirely new types of extended-service contracts for dealers to sell.
Extended-service contract companies offer a variety of educational programs and increasingly sophisticated electronic programs to expedite contract sales and claims processing.
But the time to make the initial pitch to consumers is in the F&I process when they’re purchasing their new or used RVs. That’s when dealers have an opportunity to educate their customers so that they know the differences between warranties and extended-service contracts.
Warrantech Automotive, an AmTrust Group Co.
Product offering: Warrantech markets exclusionary and stated extended-service contracts using the CampersEdge brand name. The company covers motorhomes valued at up to $5000,000 and with up to 100,000 miles. It also covers towable units valued at up to $150,000 and that are up to 15 years old. The company also offers specialty contracts for RV technical assistance; 24/7 roadside assistance; windshield repairs; painting and interior; tire and wheel coverage; as well as key/remote replacement coverage. Warrantech also provides Towbusters coverage with 24-hour emergency towing, roadside assistance, lost key and lockout service, map routing assistance and theft as well as hit-and-run protection. The company also offers guaranteed asset protection (GAP) coverage.
Article Source: https://warrantech.com/blog/february-2017/extended-service-contracts-help-build-a-comfort-zo/