Extended Warranty Financing

February 8, 2021

Extended Warranty Financing

Extended warranties are a billion-dollar industry in the United States because they are an appealing option for customers who want to protect their financial investments. These warranties are an optional finance and insurance (F&I) product that will cover the cost of certain automobile repairs, saving the customer money.

Line 5 is a warranty finance company that works with the F&I departments in automotive dealerships to finance these warranties. Our partnership will allow your business to sell more auto warranty financing plans by giving you the flexibility to work with all your customers.

Features of an Extended Warranty

Extended warranties are an add-on option that customers consider when purchasing a new or used car. An extended warranty can provide coverage beyond the warranty's end date or overlap with the manufacturer's warranty. This protection is precautionary and will help the customer if there is ever a large repair bill. 

Though the customer does not have to purchase an extended warranty, it is useful for covering service bills that they would otherwise have to pay for themselves. In the automotive industry, this protection helps customers keep their vehicles for longer.

One advantage of selling extended warranties to your customers is an increase in loyalty. When your buyer needs a repair, they will bring their car into your dealership's authorized repair center per the warranty agreement. Since they will continue to come to you for the services they need, these customers will be more likely to work with you again in the future.

Costs and Coverage

Auto warranties generally cover the same parts as the original warranty, starting once the latter expires. They will last until the car reaches a certain mileage or ownership has lasted for a predetermined number of years. This coverage may transfer to the new owner if these conditions are not met before the customer sells the car. However, the customer must follow manufacturer recommendations for routine maintenance to keep the extended warranty valid.

When you partner with Line 5, we will financially back your extended warranty products. You can negotiate the cost of the warranty plan with your customer to find a solution that meets their needs.

Benefits of Extended Car Warranties

Even though the new and used cars in your lot are reliable, extended warranties are a beneficial option for customers because they:

  • Offer peace of mind: Customers can be confident that the extended warranty will cover any repairs they need for their vehicle, eliminating concerns over how they'll pay if something goes wrong. These policies help the customer feel prepared for the unexpected.
  • Act as quality assurance: An extended warranty for a car implies that the vehicle is reliable. If the customer has to pay for all repairs and service, the return on their investment decreases. Since the dealership is expressing confidence in that investment by offering a warranty that covers these costs, it suggests that the vehicle is unlikely to have major problems.
  • Cover all vehicles: Customers can purchase an extended warranty for all their cars, not just those that will soon have an expired warranty, gaining better coverage for these investments.
  • Help customers keep their vehicles: Because the extended warranty goes beyond the standard warranty limits, repairs and maintenance costs will be covered for a longer time. This protection helps keep the vehicle operating smoothly, so the customer can keep it for longer.
  • Provide cost savings:If the customer keeps their vehicle for a long time, they may have more repair and maintenance needs. Without a warranty, the customer would be responsible for the whole cost of a repair that could exceed what they can afford. Since the extended warranty covers these charges, the customer will save money even after factoring in the cost of the extended warranty itself.
  • Increase the resale value: If the warranty transfers to the next owner, it will increase the value of the customer's car.

Explaining these advantages to your customer will help them understand the value of purchasing an extended warranty for their newly purchased vehicle from your auto dealership, increasing the likelihood of them making this investment. Line 5 helps make these extended warranty products possible through car warranty financing.

Auto Warranty Financing With Line 5

Line 5 helps finance extended warranties for trucks, automobiles, sport utility vehicles (SUVs) and other vehicles at automotive dealerships. With our car warranty finance installments, your customers will gain the coverage they need while you gain more sales and revenue.

Line 5 makes it easier for you to sell your plans and close deals quickly. We will approve all your customers for extended warranty financing, regardless of their credit history. We'll also fully fund the extended warranty, going beyond conditional approval limits. You can set the finance plan's specifics, including term length and interest rates, so they are tailored to a customer's budget.

Additionally, Line 5 does not require a down payment. Once your customer fills out and signs the application, we will have the funding available within 48 hours.

Why Choose Line 5 as Your Auto Dealer Financing Company?

Line 5 is an F&I financing company operating with the goal of helping your automotive dealership sell more products and make more money. Our F&I services will boost your success because we work closely with F&I departments to meet their goals and understand their processes.

Line 5 finances all F&I products and services provided at dealerships. Our services help you gain more customers because our sales process eliminates many barriers, including credit approval, down payments and interest rates.

We also offer F&I dealership software that streamlines simple processes and helps you manage your F&I contracts and customers. As a result, your dealership can become more efficient, and you can dedicate time to other tasks.

Become a Line 5 Partner Today

Line 5 will help your automotive dealership get every product, every customer, every time by providing advantageous financial installments. As an auto finance company for dealers, our support will help you sell auto warranty financing plans and make more money. Sign up on our website to become a partner today, or complete our contact form or call 844-775-4635 for more information.