ABM Q4 - Flipbook - Page 42
OPI N I O N
R E TA I L
Longer warranties
make sense
→ Mike Edwards is chief revenue officer at AutoProtect Group
A
typical used car is sold
with a warranty of between
three and six months.
Despite some claims that
the Consumer Rights Act
will cover unexpected
mechanical failures, the
reality is that while it
provides an important level
of consumer protection for used-car
purchasers, it is not a ‘catch-all’ for all
faults arising over the average four-year
ownership period.
That is why we are encouraging
dealers to ensure all customers are
aware of the availability of a longer-term
extended warranty that can help cover
the cost of unexpected repairs, as the
cost of such repairs is rising fast while
household disposable income is falling.
Rising cost, rising repairs
Today’s cars may be safer and more
convenient, but the new technology that
supports these features adds an extra
layer of cost if things go wrong. Even
traditional parts are becoming far more
expensive, as are labour costs, due to
shortages of skilled technicians. Finally,
as all businesses recognise, just opening
the doors to welcome customers has
become more expensive.
The net result, as we have noticed, is
that double-digit increases in meeting
warranty claims compared with a year
ago are now commonplace.
The cost-of-living crisis continues to
affect many households, as price and tax
rises erode average spending power. The
situation has worsened since the Iran
war began, and motoring costs have
been at the forefront of inflation news.
Filling an average family car with diesel
costs around £110, £31 more than at the
start of the conflict. Petrol prices have
risen less, by over 40p per litre.
Even before these price rises, the RAC
highlighted that the cost-of-living crisis
has reduced people’s ability to cover
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AUTOMOTIVE BUSINESS
Q4 2026
unexpected car repair bills. In 2025, 65%
of drivers had to pay for unexpected car
repairs, up from 59% in 2024. Almost four
in 10 (39%) said they’d struggle to pay
a bill of up to £500. The average repair
bill now stands at £650, up by £33 from
last year.
The Consumer Rights Act
Under the Act, a car supplied by a dealer
to a consumer must be of satisfactory
quality, fit for purpose and as described.
It does not mean the Act covers every
fault that may arise over the course of
ownership – far from it.
Trading Standards makes clear that
the vehicle must meet the standard a
reasonable person would expect, taking
into account several factors, including
its age, history (including mileage), price,
description and intended use.
Customer support for faults under the
Consumer Rights Act is weighted towards
the first six months of ownership, during
which it is generally assumed that
faults may have existed at the point of
purchase, though this is not universal.
After six months, the burden of proof
shifts to the customer to show that the
fault existed at the point of purchase,
which may not be straightforward.
Used cars, especially as they age,
are more likely to suffer an unexpected
failure than new cars because, quite
simply, they have been used!
Good customer care
While a three-month to six-month
warranty may be included in the sticker
price, offering customers the option of
an affordable, longer-term warranty,
potentially from a different supplier –
recognising that some dealers offer their
own shorter-term warranty support
– is good customer care. It can provide
additional income, but above that, it can
only enhance a dealer’s reputation for
customer care and increase the likelihood
of future custom.
