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Auto warranties and service contracts are essential for protecting vehicles against repair costs while boosting dealership profits and customer loyalty. However, 65% of car buyers remain unaware they qualify for these plans. This article compares six leading providers - Endurance, Toco, Zurich, American Dream Auto Protect, CARCHEX, and Omega Auto Care - covering their offerings, pricing, claims processes, and dealer support. It also explores upselling strategies to maximize revenue and retention.
| Provider | Mileage Limit | Claims Process | Dealer Support Highlights |
|---|---|---|---|
| Endurance | Up to 200,000 | In-house, mobile app | Real-time tracking, training modules |
| Toco | Up to 250,000 | Digital, fast | Customizable tools, 30-day commission payout |
| Zurich | Up to 150,000 | Streamlined | Onboarding, field reps, co-op marketing |
| American Dream Auto Protect | Up to 130,000 | Personalized | Promotions, flexible quotes |
| CARCHEX | Up to 250,000 | CRM integration | Remarketing for expired contracts |
| Omega Auto Care | Up to 250,000 | Direct management | Personal interaction, maintenance perks |
Upselling requires personalized F&I integration, tailored presentations, and consistent customer touchpoints through service visits. Retention-focused strategies like proactive communication and repeat purchase incentives can significantly enhance dealership profits by up to 95%.
Endurance stands out as a prominent provider of extended warranties, offering a variety of plans tailored to meet the needs of both individual consumers and dealerships. Their flexible payment options and comprehensive services make them a popular choice in the industry.
Endurance offers a range of tiered plans to suit different needs. Their most comprehensive plan covers nearly all major components, excluding typical wear-and-tear items. Other plans are designed to focus on specific areas, such as key systems, powertrain components, or vehicles with higher mileage. No matter the plan, customers benefit from added perks like roadside assistance, rental car reimbursement, and trip interruption coverage.
The cost of an Endurance warranty depends on the vehicle's specifications and the level of coverage chosen. Customers have several payment options, including monthly payment plans, dealer financing (which allows warranty costs to be rolled into vehicle loans), and upfront payment for more basic coverage. Pricing is also influenced by factors like claims history and regional repair costs, ensuring tailored rates for each customer.
Endurance simplifies the claims process by managing it entirely in-house. Once the necessary documentation is submitted, pre-approved repairs are processed quickly. Customers can use the Endurance mobile app to submit claims, upload photos, and track the status of repairs. Additionally, the company’s direct payment system with authorized repair facilities means customers don’t have to pay out of pocket for repairs upfront.
Endurance provides robust support for dealerships, offering online training modules and workshops to help integrate financing options and improve customer presentations. Through a dedicated dealer portal, dealerships can track commissions in real time, manage accounts, and access customizable marketing materials. On top of that, dealerships benefit from personalized support through account representatives and additional marketing tools, helping them strengthen customer relationships and streamline operations. These resources create a strong framework for dealer-customer engagement, positioning Endurance as a standout choice in the marketplace.
Toco is a warranty provider that uses digital tools and efficient processes to improve operations for dealers and enhance customer service. Let’s break down what they offer.
Toco offers several coverage levels to suit different vehicle types and budgets. Their plans range from basic powertrain protection to full coverage for major systems, including options tailored for high-mileage vehicles. All plans come with key benefits like:
Customers can also choose from deductibles ranging from $0 to $200, depending on their needs. Toco covers vehicles up to 15 years old with mileage as high as 200,000, making their plans accessible to a wide range of drivers.
Toco’s pricing is mid-range and adjusts based on factors like a vehicle’s age, mileage, and chosen coverage. They offer flexible payment options, including monthly installments, upfront payments, and financing integration.
Their pricing model considers vehicle reliability, repair costs in specific regions, and claims history, helping dealers offer competitive rates while protecting their margins. With Toco’s digital platform, dealers can generate real-time quotes during customer interactions, streamlining the sales process.
Toco has embraced digital claims technology to speed up the approval process. Through their mobile app, customers can submit claims with photos and receive approvals for most standard repairs within 24 hours.
With a network of over 25,000 authorized repair shops across the country, Toco ensures customers can easily access covered services. They also handle payments directly with repair facilities, sparing customers from upfront costs. Meanwhile, both customers and dealers can track claims in real-time through Toco’s digital dashboard, which also provides updates throughout the repair process.
Toco goes the extra mile to support dealers with their dealer portal system, which offers:
They also provide ongoing training through online sessions and regional workshops focused on sales and customer retention. Dealers benefit from dedicated account support and marketing tools that can be tailored to their needs. Toco’s commission payments are processed within 30 days of contract activation, ensuring dealers maintain steady cash flow.
Zurich North America has built its reputation as a reliable provider, recognized for its financial stability and strong partnerships with dealers. These qualities not only support consistent sales but also help dealerships boost profitability while maintaining lasting customer relationships.
Zurich offers a range of protection plans designed to fit various customer needs and budgets. These plans span from basic powertrain coverage to more extensive options that cover multiple vehicle systems. A standout feature is their broad coverage approach, which excludes only specific components, providing customers with peace of mind. Plans are available in different durations and can be enhanced with add-on benefits tailored to customer preferences. This flexibility helps dealers present a compelling offering that aligns with Zurich's premium value.
Zurich's pricing reflects the extensive benefits included in its plans. While the contracts are positioned at a higher price point compared to basic alternatives, the comprehensive coverage and Zurich's trusted reputation make the cost easier to justify. The company also offers flexible payment options that accommodate dealership needs, including cash transactions. Adjustable deductibles are another feature, adding an extra layer of customization for customers.
Zurich has streamlined its claims process to ensure quick and hassle-free resolutions. With a nationwide network of authorized repair facilities, customers benefit from direct payments to repair shops, eliminating the need to pay out-of-pocket upfront. Dealers also have access to a claims portal, enabling them to track claim statuses and address any issues promptly. This efficient system underscores Zurich’s commitment to excellent customer service.
Zurich goes beyond offering products by providing robust dealer support to drive sales success. Dealers benefit from product education, sales training, and real-time assistance through an online portal. New partners receive hands-on onboarding support, ensuring a smooth introduction to Zurich’s offerings. Additionally, field representatives regularly visit dealerships to provide guidance, foster sales growth, and strengthen customer relationships. Marketing co-op initiatives and in-person training further enhance the support framework, making Zurich a valuable partner for dealerships.
American Dream Auto Protect (ADAP) stands out in the extended warranty market by offering flexible and budget-friendly options. Backed by over 20,000 reviews, ADAP provides three distinct protection plans - Platinum, Gold, and Silver - designed to cater to a range of budgets and vehicle needs. Let’s dive into what these plans offer and their pricing structure.
ADAP's plans are organized into three tiers to suit different levels of coverage:
Each plan is designed to address the unique needs of customers, whether they prioritize comprehensive coverage or cost-effective essentials.
ADAP takes a personalized approach to pricing, tailoring costs based on the specific needs of each vehicle. Instead of standardized rates, they provide customized quotes, which you can request through their "Fast, Free Quote" option.
They also sweeten the deal with promotions, including $350 off new vehicle protection plans and three months of free coverage for new customers. This flexibility makes their plans accessible and appealing to a wide audience.
CARCHEX has carved out a niche by focusing on dealer partnerships and remarketing strategies. Their advanced systems are designed to help dealerships optimize service contract revenue throughout the entire customer lifecycle. This approach opens up opportunities for dealers to rethink how they maximize their revenue streams.
CARCHEX provides a range of vehicle protection plans tailored to complement dealership F&I (Finance and Insurance) operations. Notably, it serves as the official extended warranty provider for Smart Cars of America. Additionally, CARCHEX has received recognition as a trusted provider of vehicle protection plans on platforms like Kelley Blue Book (KBB.com) and Autotrader, both owned by Cox Automotive. This multi-platform presence gives dealerships more ways to connect with potential warranty customers.
CARCHEX has partnered with Zurich North America to create a custom marketing program for Zurich’s auto dealer clients. This initiative specifically targets car owners who either missed out on purchasing initial service contracts or have coverage nearing expiration.
"We are very excited to work with Zurich to offer dealer customers a robust opportunity to increase F&I product sales", said Jason Goldsmith, CARCHEX CEO.
The program uses sales data to market upcoming coverage opportunities directly to customers. Any resulting sales are tracked and credited back to the originating dealership, ensuring dealers benefit from these remarketed contracts.
CARCHEX simplifies claims processing, reducing the workload for dealers while improving customer satisfaction. Its WarrantyCRM remarketing program integrates seamlessly with Autobase's Platinum CRM Program, enabling dealers to re-market service contracts to their existing customer base. By using automated marketing campaigns and data analysis, the system identifies potential warranty buyers and engages them, allowing dealers to concentrate on their primary sales and service activities.
For dealerships looking to boost service contract revenue and strengthen customer loyalty, CARCHEX’s integrated approach offers an efficient and effective behind-the-scenes solution. These tools help dealers improve their overall F&I performance while maintaining strong customer connections.
With over two decades in the business, Omega Auto Care stands out for its focus on higher-mileage vehicles. By managing plans directly, without third-party involvement, the company aims to simplify the claims process for both dealers and customers. Omega combines a straightforward approach with tailored service and a variety of coverage options, making it a notable choice in the warranty market.
Omega Auto Care offers three main warranty plans, each tailored to different vehicle conditions and dealer needs:
All plans come with added perks, including roadside assistance, rental car reimbursement (up to $400), trip interruption coverage, and maintenance reimbursements for services like oil changes, brake pads, and battery replacements. Tire protection through road hazard coverage, up to $400, is also included across all plans.
Omega's premium plans generally range from $2,700 to $3,100 upfront. For instance, in late 2022, a 2017 Honda CR-V with 45,000 miles and a $100 deductible was quoted at $124 per month for 24 months under the New Exclusionary plan, covering 100,000 miles. Meanwhile, the Used Stated plan cost $121 per month for the same term, covering 106,000 miles.
For more budget-conscious options, the Powertrain Plus plan offers competitive rates. A 2013 Ford F-150 was quoted at $924 annually, while a 2016 Toyota Camry came in at $804 annually - both lower than comparable market rates. Dealers can also provide flexible payment options, such as a 5% down payment, which can make monthly costs more manageable and attract customers weighing premium coverage against their budgets.
As a direct administrator, Omega Auto Care manages claims without third-party involvement, aiming to reduce delays and streamline resolutions. However, customer experiences are mixed. While many appreciate the efficiency and support, others report delays in reimbursements and occasional difficulties with claims due to fine print exclusions.
Omega has earned an A+ Better Business Bureau rating since 2017, along with a 3.9 out of 5 score on Trustpilot, based on over 1,100 reviews. Positive feedback often highlights reliable coverage and helpful customer service. On the flip side, some customers mention challenges in reaching support during busy periods and frustrations over denied claims. Despite these issues, Omega's focus on personalized service strengthens dealer-customer relationships, which is key for long-term success.
Omega Auto Care’s dealer support model leans on traditional methods, prioritizing personal relationships over digital tools. Quotes are provided exclusively over the phone, as the company does not offer an online quoting system. While this approach ensures a personal touch and gives dealers more control, it may be less appealing to tech-savvy customers.
The company’s website is basic, and the absence of a mobile app underscores its conventional approach. However, for dealers who value direct communication and hands-on interaction, this model can be effective. Omega’s long-standing presence in the industry and its BBB accreditation further enhance its credibility, making it an attractive option for dealers whose customers prioritize reliability and a proven track record.
When deciding on the best warranty provider, it's essential to weigh their strengths and limitations. The table below breaks down the key features of several providers, highlighting their coverage options and plan structures.
| Provider | Pros | Cons |
|---|---|---|
| Endurance | • Offers six plans, including a detailed exclusionary plan (Supreme) and a maintenance-focused plan (Advantage), covering vehicles up to 200,000 miles. • Includes extra perks like tire repair, key fob replacement, and total loss protection. • Basic plans cover critical components such as steering, transfer case, and turbo/supercharger. |
- |
| Toco | • Provides four plans tailored to vehicle mileage, including the exclusionary Orange plan. • Extends coverage up to 250,000 miles. |
- |
| Zurich | • Offers three levels of coverage with comprehensive mechanical and electrical protection. • Known for efficient claims processing. • Covers vehicles up to 150,000 miles. |
- |
| American Dream Auto Protect | • Provides three plans with basic roadside assistance and coverage for up to 130,000 miles. | • The Platinum plan uses stated-component coverage, which protects fewer parts compared to some mid-tier options. |
| CARCHEX | • Features five plans, including an exclusionary Titanium plan and a specialized "Extra Care" option for non-powertrain components. • Offers coverage for vehicles up to 250,000 miles. |
- |
| Omega Auto Care | • Provides three main plans with two powertrain upgrade options. • Includes one year of maintenance benefits and road hazard tire repair coverage. • Extends coverage up to 250,000 miles. |
- |
This comparison highlights the variety in plan options and mileage limits, which range from 150,000 to 250,000 miles across providers. For instance, Endurance stands out with its six-plan lineup, including a nearly all-encompassing exclusionary option, while American Dream Auto Protect's Platinum plan offers less extensive coverage despite its branding.
For dealers, selecting the right provider is about more than just immediate sales - it’s also about fostering long-term customer loyalty. Zurich, for example, is praised for its smooth claims process, which can enhance customer satisfaction. Providers like CARCHEX and Omega Auto Care, with their high mileage limits, may appeal to customers with older or high-mileage vehicles.
In the buy-here-pay-here market, these differences take on added importance. Service contracts can help dealers maintain ongoing connections with customers, creating opportunities for recurring revenue and reinforcing trust through reliable coverage options.
When it comes to boosting dealership profitability, upselling isn’t just about closing a sale - it’s about creating lasting customer relationships. By treating service contracts as tools for building trust rather than one-time transactions, dealerships can transform these opportunities into long-term loyalty.
Integrating Finance and Insurance (F&I) seamlessly into the upselling process makes presenting service contracts more efficient and effective. With tools that enable real-time quoting, electronic contract generation, and instant enrollment, dealerships can reduce friction and improve attachment rates. Advanced F&I software even identifies upselling opportunities by analyzing customer profiles and vehicle data, making the process more targeted and personalized.
Take digital menu selling as an example: dealerships using this approach, paired with personalized video presentations, have seen a significant jump in contract sales and customer satisfaction. These methods not only drive profitability but also encourage repeat business. The secret? Clear communication that highlights the value of the service contract. However, challenges like customer skepticism, perceived high costs, and confusion about coverage benefits remain. Equipping F&I staff with the skills to address these concerns can help overcome resistance.
Building on F&I integration, tailoring presentations to individual customers further boosts acceptance rates.
Tailored presentations are key to connecting with different buyer segments. For instance:
By aligning presentations with the financial needs and preferences of each group, dealerships can increase contract acceptance and satisfaction. In fact, top-performing dealerships report service contract penetration rates exceeding 40%, with each contract contributing between $1,000 and $2,000 in gross profit.
Service contracts naturally create regular touchpoints by requiring customers to return for covered repairs. These visits are golden opportunities for dealerships to build trust, offer additional services, and maintain communication. Not only do service contract holders often come back for routine maintenance, but they’re also more likely to purchase their next vehicle from the same dealership.
These touchpoints pave the way for ongoing service strategies that deepen customer loyalty.
Proactive communication is essential for keeping customers engaged. Sending service reminders, maintenance tips, or exclusive offers keeps the dealership top-of-mind and builds trust. Additional perks, like discounts on future purchases or priority service appointments, further encourage loyalty. According to Bain & Company, even a modest 5% increase in customer retention can lead to a 25% to 95% boost in profits. This highlights just how impactful nurturing these relationships can be for long-term success.
In the Buy Here Pay Here market, maintaining customer relationships is even more crucial. Many buyers return to purchase another vehicle within a few years. However, when dealers sell their accounts, they often lose direct contact with the customer. Debexpert’s "servicing retained" option offers a solution. It allows dealers to sell accounts while keeping the customer relationship intact. This way, dealers can continue earning revenue from servicing accounts and maintain direct communication with customers, a strategy particularly valuable for BHPH models where repeat business drives profitability.
The most successful dealerships go beyond tracking initial contract sales. Metrics like customer return rates and repeat purchases are key indicators. For instance, 8 out of 10 customers with a positive sales experience are likely to return for service, and 9 out of 10 are likely to buy another vehicle. Additionally, loyal customers often generate powerful word-of-mouth referrals, which can outperform traditional advertising in driving new business.
Selecting the right service contract provider comes down to understanding your dealership’s unique customer base and business model. For dealerships seeking extensive coverage, Endurance offers protection up to 200,000 miles, along with a range of elite benefits. If your focus is on older, high-mileage vehicles, CARCHEX provides flexible plans with coverage reaching up to 250,000 miles. For those prioritizing affordability, Toco delivers budget-friendly, month-to-month options starting at $79 per month. Meanwhile, Omega Auto Care stands out by bundling maintenance benefits with every plan. Each of these providers brings distinct advantages, making it essential to align their strengths with your dealership's specific needs.
For Buy Here Pay Here (BHPH) dealers, maintaining strong customer relationships is key. Debexpert’s “servicing retained” option allows dealerships to sell their portfolios while keeping direct contact with customers - ensuring a steady revenue stream from ongoing account servicing.
However, success in service contracts involves more than just picking the right provider. It requires seamless integration into your F&I processes, tailoring presentations to fit customer needs, and maintaining proactive communication. By excelling in these areas, dealerships can not only increase immediate profits but also build lasting customer loyalty and drive repeat business for years to come.
When choosing an auto warranty provider, dealerships should focus on reliability, transparency, and exceptional customer service. A provider known for processing claims quickly and fairly is crucial for maintaining the trust and satisfaction of your customers.
Pay close attention to the coverage options available. Look for plans that cover major repairs and routine maintenance while offering flexibility to suit your dealership’s specific needs. It’s also important to assess how well the provider works with repair facilities and their reputation for supporting both dealers and customers effectively.
Finally, consider providers that offer ways to keep customers engaged over time. For instance, service contracts can create regular touchpoints, helping you strengthen relationships and foster long-term loyalty with your buyers.
Dealerships have a great opportunity to strengthen customer loyalty and increase revenue by offering service contracts as part of the car-buying process. The key is to focus on the long-term perks these contracts provide - like saving money on future repairs and enjoying added peace of mind. By tailoring each recommendation to match the buyer's specific needs, the offer feels more personal and relevant.
Another advantage of service contracts is the chance to establish ongoing connections with customers. Regular touchpoints help the dealership stay top of mind, fostering trust and loyalty. This not only encourages repeat visits for maintenance or repairs but also makes it more likely that customers will return when it’s time to shop for their next car.
Omega Auto Care offers solid protection for older, high-mileage vehicles, covering cars up to 15 years old with less than 250,000 miles. One of the standout features is the flexibility to choose your own repair shop, making the process convenient and stress-free.
Their plans are specifically crafted for high-mileage vehicles, helping you extend the life of your car and safeguard your investment as it gets older. With a range of coverage options, Omega Auto Care provides a dependable solution for keeping aging vehicles in good condition.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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