3 Signs You Should Invest In Extended Protection Plans
In just a few short months, construction season will be ramping up, moving quickly into full swing. Will you be ready? Now is the time to make sure everything is in order, so you can take advantage of this year’s earliest opportunities to make money and remain in high gear all year long. If you’re thinking strategically, preparation includes equipping your machines with extended protection plans. It’s a choice that could boost your dealership’s bottom line nicely by the end of the year.
Even though it may be a while before we see tulips and daffodils, right now there are three definite signs you should invest in extended warranty plans. Construction equipment is expensive. It’s built to be tough and last many years, certainly well beyond the original warranty period. But you need to protect your iron for its entire lifetime, to keep it working. Extended warranty plans can increase sales and customer satisfaction, too.
1. Contractors are looking to buy new equipment.
For your customers, spring means stocking up on new machinery. Replacing old models with new, more productive ones. Filling in gaps with equipment that enables them to take on more jobs, or more diverse jobs. By explaining how extended warranty plans can help them ensure the longest, most productive life for those new machines, your dealership is providing a valuable service. You have their back.
2. Used equipment sales are on the rise.
Overall, prices rose 1.2% during latter half of 2013. That’s good news, but why not take that one step further and add an extended warranty package for the used equipment you sell? That’s insurance that directly protects the new owner’s investment, and that can have significant meaning for the them down the road.
Extended coverage can be a particularly attractive selling feature for used equipment. That puts you ahead of the competition. You can get an even better price for each machine. And selling used equipment faster means you can make room for more new equipment in time for busy spring sales. Or late-season fleet additions.
3. Rental rates are on the rise, too.
As of last fall, construction equipment rental rates increased more than 4% compared to a year earlier. If your dealership has a rental division, this is more great news – an opportunity to generate additional revenue from this important profit center. But rental inventory that’s down for repairs can’t earn income, and repairs can be very costly. Covering your rental fleet with extended warranty plans protects your assets and your earning power as well.
Of course you’re covered loss, damage or theft, but covering each machine’s powertrain and hydraulics helps you keep them in tip-top condition as they age, increasing their value as rental assets.
Now is a good time to review your policies and rental agreement, too. That way, you’ll be fully prepared, confident your staff and equipment are ready to rent. Make sure:
- Warning and other important labels are in place and easily legible.
- Each machine has its owners manual.
- One of your certified technicians inspects each piece of equipment before it leaves your yard.
- You ask whether the operator is properly trained.
Offering a loss/damage waiver allows customers to purchase additional coverage for loss, damage or theft while your equipment is in their possession. That’s a good idea to protect both of you.
Signs of spring will be here soon. Will you be ready to make the most of the 2014 construction season?