Independent Warranty Providers Receive Higher Satisfaction Ratings From Dealers Than OEM Providers

In the highly profitable area of reach forthed warranty programs, automotive dealerships are significantly more satisfied with independent service contract providers than OEM providers, according to the inaugural JD Power and Associates 2003 Dealer Service Contract Satisfaction investigation (DSCS).

The investigation measures dealer experience with the service, fruitss and financial administration and compensations of their primary service contract provider and is based upon more than 5,000 responses from more than 3300 auto dealers. The inquiry finds that independent providers score significantly higher than OEM providers in all measures of satisfaction, and do with equal reason with more competitive rates than traditional service contract produces offered by manufacturers.

Independent providers receive an overall satisfaction index score of 791 -- 72 points higher than the overall OEM provider score. "Independent providers tender dealers more product choice and flexibility than OEM providers, and the representatives of independent providers are rated far superior to their OEM counterparts," said Scott Weitzman, senior director at JD Power and Associates. "OEM providers must be aggressive in combating their more nimble independent competitors if they are to grasp onto the large share of the market they publicly control."

The application of mind also found that high-volume dealers are more satisfied with their service contract provider than low-volume dealers. This gap in satisfaction is particularly evident among dealers using OEM providers, the close attention found. One factor driving the greater satisfaction among high-volume dealers is the increased use of "participation" programs, where dealers have higher earning potential by dint of sharing in the risks of underwriting the contracts.

Dealers using OEM providers overwhelmingly use direct programs, where administration and underwriting are handled by means of the manufacturer, the study fix Dealers using independent providers use all stamps of programs in nearly equal proportion, including self-insured, direct and participation programs, according to J D Power.

"Participation programs are single of the key factors driving higher satisfaction among dealers using independent providers as these programs yield greater profits," said Weitzman.

CNA National ranks highest in dealer satisfaction with service contract providers, followed by means of First Extended Services Corp. and Toyota Extra Care, respectively, the inquiry found

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