Car makers cool on following Vauxhall’s extended warranty lead

Vauxhall caused a stir a couple of months ago when it announced its lifetime, 100,000 mile warranty on all its cars, but it doesn’t look like anyone is looking to follow suit, according to news agency, Headlineauto.

The offer of a long warranty is designed to encourage customer back into dealerships for servicing. Main rival Ford, the top selling brand in the UK, says it is looking at other ways to keep its customers coming back.

Managing director Nigel Sharp said at the Paris Motor Show that giving longer or lifetime warranties could be open to abuse.

"There are people who seek to put one over on you and this ultimately puts up the price to others. We are, however, looking at ways to keep our customers longer. How we can use the network better to keep them coming back for servicing.

"Ford dealers may be more expensive than some independent workshops but the network is more capable and has the best technology to look after Ford vehicles. We have to work on how to lengthen our relationship with customers once the warranty has run out."

He said that the company had formed a strategy group with dealers to address this issue. "We need to be more consistent with customers and invest time and effort in the relationship."

David Hodgetts, MD of Honda UK said: "When new warranties are introduced everyone starts looking at their own but there is still a wide variation.

"Our customers want a full warranty for three years so this works for us. Over the years warranties have gone from one to two and now three years is the norm. We review this every now and again but we certainly have no plans to extend our term."

SEAT UK boss Peter Whinney, said: "We are not looking at extended warranties. There seems to be so much small print with many of these that it can be very confusing for the customer. If you tell someone something is free and it turns out to be not quite like that, then that is a big negative.

"Most of our customers are fairly young and buy our cars on 3 year PCPs and so are used to changing their vehicle at the end of that period. They are not interested in high mileage warranties, and if they were, they can get extended warranties from us in any case."

Korean carmakers Hyundai and Kia currently offer long warranties with their vehicles and claim less small print and qualifying clauses than Vauxhall.

Hyundai offers a 5-year unlimited mileage guarantee while Kia has a 7-year or 100,000 mile offer on all its cars.

Stephen Kitson, Kia’s PR chief, said: "We were first to market with the 100,000, 7-year warranty and we are delighted that we have prompted another manufacturer to follow our lead. Anything that is good for the customer is fine by us.

"But we believe our warranty is a lot more transparent – and unlike Vauxhall, it is passed on to future owners of the vehicle.

"We don’t see the value in having too much small print."

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However Vauxhall managing director Duncan Aldred said that the company’s move had been well received.

He added: "Customer reaction has been good, they see it as a positive statement on the quality of our products."

He added that the warranty is not passed on to future owners and that 95 percent of Vauxhall owners will not cover 100,000 miles in their new car.

Author: Faye Sunderland, October 1st, 2010
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