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May 11, 2022

RAC embarks on a dealer recruitment drive

By Motor Finance

The RAC Dealer Network is embarking on a dealer recruitment drive following increasing consumer demand that drove a 25% year-on-year growth in revenues from warranty premiums during 2021.

Sean Kent, European Director of Automotive for Assurant, which partners with the RAC in the warranty and aftersales market, said that the results were also 9% up on 2019, showing a marked increase compared to pre-Covid conditions, despite various lockdown periods leading to interruptions in business.

“The total number of used car retailers in the RAC Dealer Network now numbers more than 1,300 and we’re looking to add around 200 during the first half of this year.

“Our target remains the same – to work with dealers who both share the RAC’s ethos of placing the customer first and are committed to being good ambassadors for the brand. We are working hard to identify businesses that fit this brief and will become successful members of our network.”

Sean Kent, European Director of Automotive for Assurant

Sean Kent explained that premium revenue growth during the last two years had been prompted by two key trends.

“The first is that we are seeing a higher propensity among customers to upgrade their warranty at the point they buy a car, either by opting for longer or more comprehensive cover. It is clear that they are seeking higher levels of protection for the purchases, especially bearing in mind recent stock shortages.

“Secondly, we’ve noticed a general upgrading of warranties provided as standard by dealers with new vehicles. These have been generally moving from providing a three-month term to providing a six-month term. This is happening very much in response to consumer demand.

“These are both long-term trends but do seem to have accelerated during the stock shortages of the last couple of years. Used cars are becoming more expensive and customers appear to be looking for better protection from unexpected motoring costs.”

Sean added that further growth had been prompted by innovative new products introduced across the RAC Dealer Network, including the RAC Electric Vehicle (EV) Warranty, alloy wheel and cosmetic damage insurance, and specialist preparation standards for vans, motorhomes and motorcycles.

“We have been working to meet changing market dynamics, such as satisfying the need for a dedicated EV warranty, and also to appeal to a wider range of dealers through cover for new vehicle types and provide a larger variety of products for retailers to offer.

“As well as the brand recognition provided by working with the RAC, these enhancements are very much part of our proposition as we look to add new dealers to the network over the next few months.”

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