Strategies for promoting extended car warranties

May 24, 2024

As a car dealership owner, you’re always looking for ways to enhance customer experience and maximize performance. One powerful yet often underestimated strategy is promoting extended warranties. This article explores the benefits of extended warranties for both your dealership and your customers and provides actionable tips on how to effectively market them.

Why do extended warranties matter?

Extended warranties, also known as service contracts, provide coverage beyond the standard manufacturer’s warranty. They can cover a range of repairs and services, offering peace of mind to customers and adding value to their purchase.

What are the benefits of extended warranties for dealers?
  • Enhanced customer loyalty: Customers who purchase extended warranties are more likely to return to your dealership for servicing, fostering long-term relationships.
  • Reduced customer anxiety: By offering extended warranties, you help alleviate customers’ fears about potential future repair costs, making them feel more comfortable as their vehicle ages out of their manufacturer’s warranty.
  • Competitive edge: Partnering with F&I providers who offer comprehensive warranty coverage and consistently provide positive experiences to customers can set your dealership apart from competitors who do not value such benefits.
  • Increased profitability: Extended warranties provide additional revenue streams to dealers through the F&I and service departments.
What are the benefits of extended warranties for customers?
  • Financial protection: Extended warranties protect customers from unexpected repair bills, offering a safety net for major mechanical issues.
  • Peace of mind: Knowing that their vehicle is covered for an extended period can give customers confidence in their purchase.
  • Convenience: Extended warranties often include perks such as roadside assistance and rental car coverage, adding to the overall value.
How should car dealers promote extended warranties to their customers?
  • Educate your sales team: Your sales team plays a crucial role in communicating the benefits of extended warranties to customers. Effective training will ensure dealers fairly and accurately present extended coverage options to customers without adding pressure or using coercion tactics. Ensure your staff understands the key features and advantages and train them to address common questions and concerns.
  • Integrate extended warranties into the sales process: Incorporate discussions about extended warranties into every stage of the sales process. This ensures that customers are aware of the option early and throughout the process, so they have time to consider the option and accurately budget their purchase.
  • Utilize marketing materials: Leverage various marketing channels to promote extended warranties, ensuring the message reaches a broad audience. Digitally, dealers should use their website, email campaigns, and social media platforms to highlight the benefits of extended warranties. In the dealership showroom, place various marketing materials including brochures, posters, and informative signage to remind customers of the option. It can also be helpful to feature customer testimonials from satisfied customers who have benefited from extended warranties.
How can dealers improve their extended warranty performance?

It’s essential to monitor the success of your extended warranty programs and make adjustments as needed to consistently improve.

Some best practices for dealers to improve their warranty performance include:

  • Tracking sales metrics: Keep an eye on how many extended warranties are sold and identify any trends.
  • Gathering customer feedback: Ask customers for their opinions on extended warranties and use their feedback to improve your offerings.
  • Adjusting strategies: Continuously refine your promotional strategies based on performance data and customer insights.
Want to boost the success of your extended warranty program? We’re here to help.

Promoting extended warranties is a smart strategy for car dealerships looking to boost sales, enhance customer satisfaction, and increase profitability.

LGM is Canada’s F&I provider of choice and partnered with over 1,400+ dealerships across the country. If you’d like to embrace this opportunity to enhance your dealership’s offerings and drive long-term success, feel free to reach out to us at