New profit center for agents: Extended warranty coverage?

Just because your buyers are driving older, higher-mileage cars doesn't mean there's nothing for you to sell them.

Consider the extended warranty.

That's the message behind EFG Companies' new Simplicity Vehicle Protection product, introduced Monday, that offers extended warranty protection for older vehicles, potentially covering costly repairs for drivers who routinely keep their vehicles beyond 100,000 miles. Five different coverage levels are available and all include alternate transportation, trip interruption coverage, an unlimited number of cliams, roadside assistance, transferability, nationwide coverage and choice of decuctible.

EFG Companies is positioning this offering as a potential profit driver for agents.

“Competition and pricing pressures from carriers continues to squeeze agency profitability,” said Mark Rappaport, President, Simplicity Division of EFG Companies, in a statement. “A large number are adding complementary revenue streams to increase the value they offer customers,”  “With Simplicity Vehicle Protection, insurance agencies have a unique opportunity to set themselves apart from their competition while increasing profitability and customer retention.”

And the potential market here is large. According to Experian's “Automotive Market Trends” report, a full 28.3% of cars on the road today are from the 2001 model year or earlier, which is 6.2 percentage points higher than it was in 2008. Short story, drivers are keeping their cars longer and maintenance is a growing concern.