CHESTERFIELD, Mo. — Forty-two percent of the 120 vehicle owners surveyed by Protective Asset Protection estimate their protection plan saved them an average of $1,000 to $2,000 in repairs or parts replacement, the F&I product provider recently reported.
This is the latest survey conducted by the F&I product provider addressing consumer and dealer trends in vehicle service contracts and ancillary product plans. Results of this survey reveal that F&I products show great value for drivers, especially on specific aspects of a vehicle.
According to results of the consumer survey, the top areas most likely covered under a vehicle service contract include steering (47.2%), technology feature service (44.4%), brakes (44.4%), electrical components (41.7%), and drive axles (41.7%). Areas such as transmission and suspension repairs (27.8%) showed the smallest responses from drivers using protection plans.
“Vehicle service contracts can be extremely valuable to drivers, especially since there are so many reasons out of the driver’s control that cause them to go into effect,” said Rick Kurtz, senior vice president of distribution at Protective Asset Protection. “With high-performance tires more sensitive to road hazards, and increasingly complex vehicle technology, there are a bevy of reasons why extra protection can equate to thousands in savings over the life of a vehicle."
In April, the F&I product provider released results of a survey of 1,573 dealership owners and professionals. It showed that a majority of dealers are concerned with falling sales, as well as dealership consolidation and administrative challenges tot heir current roster of F&I products, with 78.8% of respondents saying their current F&I products don't offer enough margin and nearly half saying their current F&I offerings are too much of an administrative burden.
According to its latest survey, nearly half of consumer respondents (51%) said they have purchased a protection plan for their vehicle. Of those opting for a vehicle service contract, more than half (53%) said they have used their plan's benefits on their current vehicle. The majority of respondents (34%) said they currently drive a small CUV/SUV for their vehicle. Most said they’ve used their benefits on general repairs (58%), while another 22% said they’ve used benefits on parts replacements.
Regarding ancillary protection programs, 69.4% said they’ve needed to have repairs on tires and wheels, 58.3% said windshield repairs, and 47.2% said exterior appearance products such as paintless dent removal. Respondents said they’ve needed to use ancillary benefits due to road hazard repairs (39%), accidents (17%), and parts replacement (11%).
“And for a dealer, these F&I products offer help with shrinking margins, as well as improved customer satisfaction," Kurtz noted. "We find these benefits to dealer and car-buyer are amplified when the dealer can brand them as their own, with more control over the administration of the protection programs."