Using the Better Business Bureau to Purchase Your Vehicle Service Contract

But do you know what you’re getting with your vehicle service contract? Does it meet your exact needs and match your particular driving habits? And, most importantly, who is the provider? The Better Business Warrantech has compiled a list of helpful questions for you to consider before purchasing your vehicle service contract:

Who backs the service contract?

It may be the manufacturer, dealer, or an independent company. Many service contracts sold by dealers are handled by independent companies called administrators. Administrators act as claims adjusters, authorizing the payment of claims to any dealers under the contract.

What’s the cost of the auto service contract?

Usually, the price of the service contract is based on the car make, model, condition (new or used), depth of coverage and length of contract. The cost of the service contract can range from several hundred dollars to more than $2,000. In addition, you may need to pay a deductible each time your car is serviced or repaired.

What is covered and not covered?

Few vehicle service contracts cover all repairs. Watch out for absolute exclusions that deny coverage for any reasons. For instance, if the contract specifies that only “mechanical breakdowns” will be covered, problems caused by “normal wear and tear” may be excluded.

How are claims handled?

When your car needs to be repaired or serviced, some service contracts permit you to choose among several service dealers or authorized repair centers. Others require the car owner to return the vehicle to the selling dealer for service. Find out if you will need prior authorization from the contract provider for any repair work or towing services. Ask how long it will take to obtain authorization and whether you can get authorization outside of normal business hours.

What are your responsibilities?

Under the contract, you may have to follow all the manufacturer’s recommendations for routine maintenance, such as oil and spark plug changes. Failure to do so could void the contract. To prove you have maintained the car properly, keep detailed records, including receipts. Find out if the contract prohibits you from taking the car to an independent station for routine maintenance or performing the work yourself. The contract may specify that the selling dealer is the only authorized facility for servicing the car.

What is the length of the service contract?

If the service contract lasts longer than you expect to own the car, find out if it can be transferred when you sell the car, whether there’s a fee, or if a shorter contract is available.

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A Holistic Approach To Warranty And Service Contract Claims

Sean Stapleton, president & CEO of Warrantech Corp., part of AmTrust Financial Services Inc., also spoke at the conference last week.

His presentation in Nashville, entitled “A Holistic Approach to Warranty & Service Contract Administration,” looked at a service call not only as an opportunity to fix a broken product, but also as an opportunity to cement a relationship with the customer.

“How the service provider responds to a claim will drive the customer’s perspective about the underlying failure,” he said. If it goes well, the customer will have a higher level of satisfaction than even cases where there was no claim.

Escalate It

Stapleton said service contract providers should never let the customer forget why they bought the coverage. In fact, he suggested that in cases where the customer’s product failed soon after it was purchased, the service provider should really make a fuss about it.

Maybe an early failure requires a response with a heightened service level, and a heightened sense of urgency? Maybe the failed product should be replaced with an upgraded unit and a sincere apology? Or maybe it’s just a matter of giving the customer a gift card, as some sort of compensation for their troubles?

Stapleton also suggested that service providers have to acknowledge that some of their social media activities need to go beyond just marketing, into actual problem resolution. And that can get tricky, because a service contract company such as Warrantech is really operating behind the scenes, supporting their retail and OEM clients and the brands they sell and manufacture.

For instance, a manufacturer or a retailer may post items to Facebook, and a disgruntled consumer may see one of those posts and take the opportunity to voice a complaint about a repair gone bad. Others see the complaint and add their own comments, and soon it’s hundreds of follow-up comments that have nothing to do with the original post. The longer it sits there unresolved, the more abuse it attracts.

Alternatively, let’s say there’s a complaint, and soon there’s a response from the company, and the problem is resolved. People read that and note the quick response, and they begin to form an image of the brand based upon its ability to respond quickly to problems.

Imagine, for instance, it’s the lonely Maytag repairman, who seemingly has nothing better to do than to monitor the appliance company’s Facebook page. When someone complains, there’s nothing more urgent in the world than fixing that problem. And the conversation is there for all current and future customers to read.

Brand Image Protection

That can turn out to be even more important a service for an administrator to provide than it is to operate a massive 24-x-7 call center that responds to complaints over the phone. For while a phone call is private, a Facebook thread is public for all to see, much like an advertisement run on television.

“I’m a huge advocate of using your partner’s brand versus building our own brand,” Stapleton said. “We’re the guy behind the scenes.”

Another attendee wondered how that would work, since it would require the administrator to essentially speak in the name of the retailer or manufacturer.

“It’s their brand you’re messing with,” he suggested.

“No,” Stapleton responded, “it’s their brand we’re protecting.”

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Warrantech Chosen as Warranty Provider for Good Sam Authorized Dealers

Good Sam Club has chosen Warrantech for their exclusive provider of extended service contracts sold through participating Good Sam Authorized Dealers. Warrantech is a world class provider of warranty products and administrative services. For more that two decades, Warrantech has been the solution for manufacturer, retailers, dealers, distributors and other sales organizations who are seeking increased profitability, enhanced market differentiation and long-term customer loyalty. Warrantech is backed by Wesco Insurance, an “A” rated insurer with many years of experience in the industry and a subsidiary of AmTrust.

“This was an easy choice for the Good Sam Authorized Dealer Network,” said Larry Chandler, Director of the Good Sam Authorized Dealer Division. “In our 12 years of experience developing service contracts for the RV market, I believe that we have found the perfect partner to represent the Good Sam brand which of course is critical to our continued success.” Chandler added that, “working with Warrantech in the development of this unique product was so pleasurable because they share our vision and ‘customer-centric’ focus.” Good Sam Authorized Dealers now include 73 locations across the United States. In addition to extended service contracts on new and used RV’s, Good Sam Authorized Dealers offer Roadside Assistance, Certified Pre-owned RV’s and other Good Sam branded products.

“Good Sam Authorized Dealers now offer the only extended service plan with unlimited mileage for motorized RV’s. Participating dealers also have state of the art on-line contract and claims management service,” said Chandler.

“We look forward to partnering with Good Sam,” said Joel San Antonio, CEO of Warrantech Corporation. “Over the years, Warrantech has established a solid reputation for handling customer service claims with fast, courteous service. With state-of-the-art technology to manage claims, and an extensive network of mechanics on call to handle needed repairs in a timely manner, Good Sam customers have access to extended service plan protection that is unmatched. Dollar for dollar, we take pride knowing Warrantech’s service combines good value with the most comprehensive coverage in the RV industry.”

About Warrantech:

Warrantech Home Service Company, a division of Warrantech Consumer Product Services, Inc. started in 1990, offers one of the most comprehensive home warranty products in the United States. For more information on home warranties, refer to: Based in Bedford, Texas, Warrantech specializes in the administration and marketing of contracts and after-market warranties on homes, automobiles, automotive components, recreational vehicles, appliances, consumer electronics, computer and computer peripherals, jewelry and furniture for retailers, distributors, internet providers and manufacturers. Acquired by H.I.G. Capital in 2007, the company continues to expand its domestic and global penetration, and now provides its services in the United States and Canada.

About Good Sam Authorized Dealers:

Good Sam Authorized Dealers bring consumers peace of mind during the purchase of a new or used RV, parts, accessories, and of course any of our Good Sam branded products! Every Good Sam Authorized Dealer has passed a rigorous Good Sam inspection to insure it meets Good Sam’s strict quality standards! Buying from a Good Sam Authorized Dealer is a one-stop shopping experience, and consumers can rest assured knowing they will be treated as a valuable customer before, during, and after their purchases! Good Sam Authorized Dealer Sales and Service is headquartered in Ventura, Calif., and is a subsidiary of Affinity. For more information on the benefits and enrollment, call 1-800-547-1948.

About Affinity:

Affinity is the nation’s largest provider of outdoor clubs, services, media and events that service the safety, security, comfort and convenience needs of the North American recreational vehicle (RV) and outdoor enthusiast market. By providing information, insights, and resources, the company champions the fun, freedom, and adventure of recreation in motion. The company works to enhance its customers’ recreational experiences and build the communities that share and promote their fun and adventurous lifestyles.

Affinity is organized into four different business units – Affinity Media, Affinity Clubs, Affinity Events and Affinity Ventures. Their corporate headquarters are located in Ventura, Calif. Subsidiary operations and divisions can be found at multiple locations throughout the United States.

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Warrantech’s Online Claims System Wins at the 2014 Stevie Awards for Sales & Customer Service

Warrantech was presented with a Stevie® Award for Innovation in Customer Service during the eighth annual Stevie Awards for Sales & Customer ServiceSM. The awards were presented to honorees during a gala banquet on Friday, February 21, at the Bellagio in Las Vegas. More than 400 nominated customer service and sales executives from the U.S.A. and several other countries attended.

The Stevie Awards for Sales & Customer Service are the world’s top sales awards, contact center awards, and customer service awards. The Stevie Awards organizes several of the world’s leading business awards shows including the prestigious American Business AwardsSM and International Business AwardsSM.

More than 1,500 entries from organizations of all sizes and in virtually every industry were submitted to this year’s competition, an increase of 36% over 2013. Finalists were determined by the average scores of 129 professionals worldwide, acting as preliminary judges. Entries were considered in 43 categories for customer service and contact center achievements, including Contact Center of the Year, Award for Innovation in Customer Service, and Customer Service Department of the Year; 43 categories for sales and business development achievements, ranging from Senior Sales Executive of the Year to Sales Training or Coaching Program of the Year to Sales Department of the Year; and categories to recognize new products and services and solution providers.

More than 260 executives around the world participated in the judging process for the 2014 awards, to determine the Finalists and then the Gold, Silver and Bronze Stevie Award placements.

Warrantech was recognized for its comprehensive online customer service and claims adjudication/administration system. Allowing for ease of use, it provides customers with access to manage purchased contracts and submit claims online. Customers can also track the status of their repairs and obtain contact information for the service provider when necessary. This helps streamline and improve customer service levels by allowing automation of key processes within claims filing.

“Entries to the Stevie Awards for Sales & Customer Service awards have almost doubled over the past few years,” said Michael Gallagher, president and founder of the Stevie Awards. “Not only have we seen a dramatic increase in the number of entries; but the judges have also seen a remarkable rise in the quality of the nominations submitted overall. We congratulate all of this year’s Stevie winners for their outstanding work.”

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‘Everything Must Go’ – including warranties?

Losing a favorite place to buy a book, procure the latest electronic gadget or update the home can send passionate shoppers into an emotional spiral much like the stages of grief.

Denial sets in first. “They can’t go out of business; they are always so helpful and sell only the best products.”

Soon after comes the inevitable anger stage. “Great, they went out of business. Now my extended service plan (ESP)* won’t be any good. How could they do this to me?”

*NOTE: While many store associates and consumers consider the purchase to be an extended warranty, this is often not the case. Many extended plans are not truly adding on to the original manufacturer’s warranty, but rather, extend the post-warranty service options and are therefore more appropriately referred to as an extended service plan, or ESP.

Retailer bankruptcies have been an unfortunate reality over the past three years with almost 70 major brands permanently closing their doors since 2009. While many analysts believe that the worst is now over, many consumers are still left wondering what will happen to their ESPs. The truth is there are a number of ways it can go.

In a worst case scenario, extended service contracts are voided when the company files for bankruptcy. This is often the case if the retailer underwrites its own ESPs. On a positive note, manufacturers’ warranties are in no way affected when a retailer closes. So, some repairs and replacements might still be covered.

In a better scenario, the retailer outsourced its warranty underwriting to a reputable third-party.

“The end of a retailer doesn’t necessarily mean the end of the extended service plan,” said Sean Stapleton, CEO of Warrantech. “Responsible companies have safeguards in place, such as third-party contract underwriters, that protect their customers, even after bankruptcy.”

So, the first step is to read the service contract papers if a store closes. Chances are that the ESP isn’t actually owned by the retailer, so there’s no reason to panic. But, rather than waiting until the unthinkable happens, Stapleton advises to read the service contract before it’s purchased to avoid potential problems down the road.

“Check the fine print for a third-party provider and consider the reputation of the company,” Stapleton said. “Look for an address to write to or a phone number you can call if there are issues.”

Consumers are spending more on electronics and other big-ticket items than ever before, so ESPs are becoming increasingly important – as long as they will be there when they are needed. On its consumer protection website, the Federal Trade Commission urges shoppers to read warranty and ESP paperwork and look for answers to the following questions:

– How long does the warranty and ESP last?
– Who do I contact to get warranty and ESP service?
– What will the company do if the product fails?
– What parts and repair problems are covered?
– Are there any conditions or limitations on the warranty or ESP?

By asking these questions upfront and ensuring that their ESPs are backed by a reputable third party, shoppers can gain peace of mind that their purchases will be covered – even if a favorite retailer permanently closes.

Warrantech administers and markets service contracts and after-market warranties on automobiles, automotive components, recreational vehicles, appliances, consumer electronics, computers and computer peripherals for retailers, distributors and manufacturers. Warrantech ESPs are underwritten by sister company Am Trust Group insurance carriers, rated “A” (Excellent) by A.M. Best Company for their financial strength and stability.

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Protecting Products, Protecting Profits with Warrantech

Extended service plans are more important than ever to consumers who need to know that the electronic devices they rely on in their daily lives will be repaired or replaced if something happens to them.

And, in a world of shrinking margins on virtually every category of electronic product, extended service plans are perhaps even more important to retailers who count on the plans to help bolster their bottom line.

For retailers to be able to sell a product that generates high profit margins, requires no physical inventory, and offers significant value to customers sounds too good to be true. But that is exactly what extended service contracts provide — and it’s the reason that more and more retailers continue to sharpen their focus on the category.

Indeed, the savviest retailers have come to realize that extended service plans give a much-needed boost to their profits, commanding significantly higher margins than the products they protect.

Equally important, extended service contracts can improve customer satisfaction and loyalty by offering peace of mind that customers are safeguarding their purchase. That peace of mind is particularly valuable to consumers investing in a high-end product or new technology; but it is also a clear benefit when applied to any device or equipment that consumers can’t afford to be without, whether for communication, education, entertainment, or a host of other daily activities.

Mobile and More
The exploding category of mobile devices is clearly one such area in which sales of extended service contracts are strong and growing. Smartphones, tablets, and laptops are among the top products for ESC attachment, according to plan providers. But also commanding solid sales for protection plans are televisions, cameras, and appliances, along with categories including furniture and even exercise equipment, as retailers diversify beyond their traditional mix.

With all that in mind, retailers are increasingly incorporating service plans into their sales and marketing DNA, with the goal of maximizing sales and attachments. And contract providers are right there to help retailers clinch the sale and increase their attach rate.

Recognizing that successful service contract sales are dependent on a consistent presentation to consumers as they purchase their electronic device or other product, one plan executive notes, “Quite simply, sales associate training is the best thing retailers can do to increase ESC sales.” But training — offered both in person and online, for both management and sales — is just one of the wide range of tools that providers make available to their retail customers.

Other methods of support include:
• integration with retailers’ point-of-sale systems to simplify transactions;
• visual marketing tools to put plans in front of customers’ eyes and offer tangibility;
• support for sales incentives, contests, and other promotional efforts.

Of course, service plan providers’ continual development of value-added benefits, attractive pricing tiers, enhanced bundles that give consumers more bang for their buck, and compelling new coverage options also contribute to the positive sales picture for ESCs. A gradually improving economy can only help, as well.

As one plan provider states, echoing the view of others in the business: “We see increased consumer confidence for the remainder of 2013. Our outlook is that the next six months will see more innovation of plans, stronger solutions for support, and growth in sales of ESCs.”

Warrantech administers and markets service contracts and after-market warranties on automobiles, automotive components, recreational vehicles, appliances, consumer electronics, computers and computer peripherals for retailers, distributors and manufacturers. Warrantech ESPs are underwritten by sister company Am Trust Group insurance carriers rated “A” (Excellent) by A.M. Best Company for their financial strength and stability. For more information, visit warrantech

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