Used car retailers should examine the possibility of matching the warranties offered by the forthcoming wave of budget car brands, says The Warranty Group.
The company points out that the effective competition for brands such as the forthcoming Dacia – which launches with the Duster 4×4 and a three year/60,000 mile warranty – will not be other new cars but used models.
Sales and Marketing Director at The Warranty Group Ian Simpson explained: “Clearly, this is something that will vary widely from retailer to retailer and model to model. A buyer for a £10,000 used BMW is not going to be considering a choice between a 3 Series or a Dacia Duster.
“However, someone looking at a two year old family soft roader from a mainstream brand is perhaps different. They may seriously consider a Dacia. For that buyer, the comfort of a three year manufacturer warranty will be very much part of the buying decision and used car retailers may well have to consider matching the budget new car proposition.”
Volkswagen has confirmed that it will also introduce a Dacia-like budget car brand in the near future and other manufacturers are believed to be making similar plans.
Simpson continued: “Budget brands look set to become a feature of the new car market and they will inevitably have a knock-on effect on the used sector during the next few years.
“By nature, these products will attract pragmatic consumers who will treat the warranty as a key part of any buying decision. Matching the level of reassurance that comes with a new car purchase may become important.”