Tag Archives: car dealer

Smoke & Mirrors: Warranty Burn Rates

Car Dealers: What’s your Burn Rate? Do you know? Is it something your warranty company keeps you informed of?

Probably not! Unless, of course, they are about to increase the premium you pay for your warranties at which time you will be told what your burn rate is – and it will generally be high!

So what is your burn rate?
Simply put, it is the amount of claims you have had on your warranties against the amount of premium that has been set aside to meet those claims in a financial year, it is expressed as a percentage.

So you may be told that your burn rate is 85%
Sounds high, and probably justifies a price increase, but it is a meaningless figure unless you know the amount that has been set aside by the warranty company to cover claims.

Your initial thoughts may be that your burn rate is 85% of the amount you are paying for your warranties. So if you are paying £180 for 12 months cover you may believe that your claims are costing £153 per vehicle (£180*85%). But trust me, if your claims per vehicle was anything like that figure your warranty company would have dropped you a long time ago.

So how do you make sense of this burn rate?
Well, first of all the amount that you pay for your warranties has nothing to do with the amount that goes into the pot to pay claims. Generally there are a lot of mouths to feed from your purchase of a warranty, the administrator, an underwriter and a broker to name a few.

As a general rule of thumb about 45% of what you pay for your warranties is taken out to feed these people. This equates to £81 using your £180 cost example (£180*45%).

The £99 that is left is the bit that goes towards paying claims. So your 85% burn rate now equates to £84.15 per vehicle (£99*85%)
Still a bit high… and that is because there are often other mouths to feed every time a claim is made. Some administrators charge a claims handling fee of as much as £45 to process a claim, and if an engineer is called in at about £120 a time to verify the cause of the fault his costs are added to the claim.

Now if we work on a claims ratio of 1:3 the claims handling fee is costing £15 per vehicle (£45/3), and if an engineer is called out to investigate 1:20 claims that will cost about £6 per vehicle (£120/20).
If we remove this £21 of costs from your £84.15 per vehicle we are now down to £63.15.

So from your possible initial thought that your claims cost were £153 per vehicle (£180*85%) when we remove the smoke and mirrors we find your actual repair costs are only £63.15 per vehicle which gives a true claims burn rate of just 35.08% (63.15/180*100)
All of a sudden a price rise seems unjustifiable.

So if you are ever quoted a burn rate as the reason for an increase in warranty costs – ask questions.

Thank you for reading and I hope the contents will serve you well at some time. Next month lets ask the question “Whose customer is it anyway?” Nothing to do with GDPR but a lot to do with your relationship with your customers.

Thanks for reading,
Alan Davison

Self-Funded Warranty: It’s Not For Everyone

That’s what I often advise prospective clients when discussing self-funded warranties, and it’s surprising how many motor dealers still aren’t aware of the huge benefits of this tried and tested method of delivering a warranty solution. But like I said in the title, it really isn’t for everyone.

So what do I mean by that? Helping motor dealers “self-fund” their own warranty is something we have lived and breathed for over 33 years. So for those thinking “is it right for my business?”, the answer to that is simple and comes in two parts.

Firstly, how much time do you spend on vehicle preparation? If the answer is not a lot, then self-funding your own warranty is not for you. Self-funding your own warranty means covering the risk yourself should something go faulty with the customers car. For dealers who have the time and resources to prepare a vehicle well, it means you reap all the rewards.

The second part to the question “is self-funded warranty right for my business?”, comes in the form of a simple test.

Look at your last full year accounts, and see how much you spent on buying-in warranties. Then, over the same period, total up the income you received back from the warranty company in authorised claim repairs. If you don’t do your own repairs, ask your warranty company for the data.

Now, deduct the total claims paid out by your warranty provider, from your spend over the same period and you are left with a figure that may resemble a telephone number.


Let’s look at an example!

A good quality dealer, let’s call them Excellent Autos, selling 30 cars a month with 12 month warranties at an average cost of £130 per warranty. They would spend a total of £46,800 a year buying-in warranties (30 x 12 x £130).

Now, let’s look at one of our established dealers who has been using our self-funded warranty for over 18 years. They use an “all components covered” level of cover with a £3,000 individual claim limit, and an overall claim limit of the price paid for the vehicle.

They are currently running at £77.93 in claims per warranty, which includes internal and 3rd party claims. Using these figures for Excellent Autos, they would have claims costs totalling £28,054.80 (30 x 12 x £77.93).

In other words:

So what do these numbers tell us?

  • In one year, our example dealer “Excellent Autos” paid £46,800 to the warranty company.
  • They provided £18,745.20 toward “other dealers” warranty costs.
  • With a self-funded warranty, that £18,745.20 would be returned back to Excellent Autos as expired profit. This is just one of the huge benefits that comes with a self-funded warranty.

So do the sum for your business – are you a net contributor, or receiver? Then ask yourself, are you comfortable with the results?

I hope this post gave you some food for thought over the festive period. Perhaps the new year is the ideal time to look at your warranty costs. Next month we will lift the lid off the smoke & mirrors that is often referred to as “Burn Rate” .

Thanks for reading and may I close by wishing you all a very Merry Christmas and a positively prosperous New Year.

Alan Davison
Managing Director
Crystal Clear Warranty

April Registrations Hit 10 Year High

Strap yourselves in, because new car vehicle sales in April took the ongoing upward climb to new heights!

Yes indeed everyone, figures published by the SMMT last month revealed a spring 5.1% surge in new car registrations pushing sales in April to 185,778 units – the highest we’ve seen in that month for a decade!

Figures released by the Society of Motor Manufacturers and Traders (SMMT) underlined a robust new car market, with registrations up for the 38th consecutive month in April. Year-to-date registrations for 2015 are up 6.4% to 920,366.


April 2015 Bestsellers – The Top 7!

  1. Ford Fiesta 10,294
  2. Ford Focus 6,347
  3. VW Golf 5,354
  4. Vauxhall Corsa 4,951
  5. Nissan Qashqai 4,697
  6. VW Polo 4,674
  7. Audi A3 3,981


Mike Hawes, SMMT Chief Executive, said, “Today’s figures highlight the current strength of consumer confidence, even at a time of such political uncertainty. We are confident that the UK’s new car market – so symbolic of economic mood – will continue to thrive, but long-term success will depend largely on economic and political stability in the months and years ahead. Whatever the outcome of today’s election, the next government must act quickly to uphold economic certainty and reassure consumers and markets.”

Thank you for reading this WAS Blog post on the latest new car vehicle registrations in 2015!


New “UK Car Dealer Chat” Discussion Forum On LinkedIn!

Are you on LinkedIn? Are you a car dealer in the UK motor trade? Come join our new LinkedIn discussion forum entitled, UK Car Dealer Chat!

We have taken it upon ourselves to create a dedicated discussion forum for UK car dealers on LinkedIn. “UK Car Dealer Chat” is exclusive to UK motor dealers on LinkedIn, and a perfect place to network and talk about issues affecting the trade and share best practice. It’s not an area for selling or selflessly promoting offers, but instead to network and collaborate with like-minded UK motor trade folk!

We also plan to invite guest contributors, who can give insights into market changes and new developments!


LinkedIn Logo

Visit the UK Car Dealer Chat Group

Click here to visit the join in the discussion! You will need to be logged into LinkedIn, and then click the big “join” button at the top! See you there!

Facebook & LinkedIn Developing New “At Work” Platforms

Social networking giants Facebook and LinkedIn are busy developing new business focused social platforms, for companies to enable their staff to collaborate and share information. Could this be a useful tool for car dealers?

Facebook has launched it’s new ‘Facebook at Work’ platform which will take on similar collaborative network solutions like Microsoft’s Yammer, Slack, Convo, Socialcast, and a number of others who are trying to tackle the “enterprise social network” space.

Not to be confused with your typical social network with endless streams of cat photos and videos of cute animals dancing, Facebook is developing a new business orientated space called Facebook At Work. Housed within the Facebook environment, this new separate space within the Facebook universe will allow companies and their staff to share information and collaborate within. A bit like an Intranet!

“Facebook at Work is a tool for co-workers to communicate and collaborate in a professional environment on Facebook.” – Facebook Website.

Checking out the Facebook website today I found support and help guides, and a registration form where businesses to sign up to the new platform.


LinkedIn Logo

Eying the opportunities, professional network giant LinkedIn has also hinted at creating it’s own enterprise social network for employees to share contact information, as well as something intended to help companies share its content with specific employee groups. The LinkedIn solution according to recode.net, will not boast a chat feature.

Lars Rasmussen, an engineering director leading the London-based Facebook at Work project told the Financial Times: “Facebook has become a bigger and bigger part of our work day. We’ve been discussing it for years so now we’re making the first externally available product.”

A Facebook at Work app has apparently been made available to a selected group of pilot companies and the social network has outsourced the service to a number of partners in an attempt to fine-tune the platform before its launch.


Could these new internal business networks be a useful tool for car dealers?

With so many work focused collaborative software options available from big name players including Microsoft, I imagine larger dealer groups would have some form of preexisting intranet in place with existing software license commitments too.

However if the Facebook and LinkedIn solutions are free to use, possibly supported by advertising, they could drive a a lot of small to medium sized dealerships to take advantage of the collaborative power of the technology.


When the two platforms are released I shall hopefully have a more in-depth look! Thank you for reading this post on the WAS Blog!

16 Of The Best UK Car Dealer Websites 2014

What are some of the best UK car dealer websites of 2014? As a consumer, who presents their dealership online in a way that would appeal to me? Who’s virtual forecourt is kept the cleanest and easiest to navigate around? Read on as I scour the web to find 16 of the best UK car dealer websites 2014!

With the huge number of car dealers in the UK including approximately 4,900 franchised dealerships, in addition to new start-ups and independent garages, just who has the best virtual forecourts on the web that might appeal to me as a consumer? As more and more customers take to the internet to discover their next car,  how a dealer “presents” their stock online is almost as important as the vehicles themselves.

I have selected a range of excellent website designs that boast their own unique strengths, and which also “caught my eye” as a consumer.

It was a tough choice! Especially as the standard of websites across the web is so high. Perhaps in the future I might feature another shortlist of dealers? I have selected 16 websites in no specific order, taking into account:

  • How easy is the stock to browse?
  • How easy the website is to navigate?
  • Is the website “eye pleasing” and enticing?
  • Is the website up to date?

Please read and maybe think how your own website compares? Does it feature any of the strengths mentioned? Would you like me to take a look at your website to offer you some feedback!? Please get in touch or comment below!

1. Marshall Motor Group – UK Wide

The Marshall Motor Group is a great place to start our 16 of the best uk car dealer websites 2014. The website is a pleasure to navigate with a clean design, and easy to use menu options. Finding your way around is very straightforward! The visitor is presented with simple search facilities and cleanly displayed search results. Cars are represented with images, a wealth of technical and historical information, and “possible alternatives” that might be of interest to the customer.

Car dealer linkmarshallweb.co.uk

Best UK Car Dealer Websites Of 2014 - Marshall Motor Group
Marshall Motor Group Website


2. Busseys – Norwich

Busseys, founded back in 1911 are an established independent  dealer group based in Norwich and the greater Norfolk area. Their website is bright, colourful, and very eye pleasing. The homepage acts like a gateway, with bright links and calls-to-action to the various Busseys services. New and used car facilities have their own dedicated web pages, to enable to the customer to search without distraction. I particularly like this website design as the green fields and blue skies remind me of the Windows XP startup screen!

Car dealer linkbusseys.co.uk

Best UK Car Dealer Websites Of 2014 - Busseys
Busseys Website


3. Benfield Motor Group – NorthEast, NorthWest & Yorkshire

Situated up in the North of the UK, Benfield Motor Group brings decades of success in the motor trade to it’s web presence with an excellent car dealer website. Visitors are presented with very easy to use search facilities, and current stock can be viewed within 1 click! This is an excellent feature as it means customers can begin viewing stock without having to navigate to different sections of the website. Helpful phone numbers, and even “live chat” are readily available  to help the visitor pursue their purchase.

Car dealer linkdrivebenfield.com

Best UK Car Dealer Websites Of 2014 - Benfield Motor Group
Benfield Motor Group Website


4. Riverside Motors – Yorkshire

The Riverside Motor Group based up in Yorkshire boasts a very attractive looking website. With clear menu options and navigation, glossy tempting offers, and easy to find stock lists with detailed vehicle information.

Car dealer linkriversidemotors.co.uk

Best UK Car Dealer Websites Of 2014 - Riverside Motor Group
Riverside Motor Group Website


5. Bob Gerard Ltd – Leicester

This website caught my eye above many others.  Bob Gerard Ltd is a new and used car dealer in Leicester selling a range of vehicles, with an impressive history spanning over 70 years in the motor trade. The Bob Gerard Ltd website boasts clean graphics, a friendly colour scheme, and easy-to-find functionality. There is also a very nice use of vintage racing cars subtly splashed across the background, to add a further sense of prestige.

Car dealer linkbobgerard.co.uk

Best UK Car Dealer Websites Of 2014 - Bob Gerard Ltd
Bob Gerard Ltd Website


6. Mike Brewer Motors – Sheffield

Upon searching through used car dealers in Sheffield, Mike Brewer Motors stood out above the rest. A clean looking website with lots of uncluttered space, Mike Brewer Motors is a pleasure to search and offers the potential customers a very easy browsing experience. With nice glossy images of the showroom and stock, sat alongside customer testimonials and nicely separated content, this website was one of my favourites. Big buttons and calls to action, and simple vehicle lists with just the right amount of information. Great job!

Car dealer linkmikebrewermotors.com

Best UK Car Dealer Websites Of 2014 - Mike Brewer Motors
Mike Brewer Motors Website


7. Motor City – Plymouth

Motor City based in Plymouth is highly successful and established name in the motor trade in the South. Their website is geared towards functionality, presenting visitors with easy to use navigation, and comprehensive information and support throughout. When searching through stock, you really get a sense that Motor City knows how to deliver the right vehicles to their customers, offering a range of information, after sales options, and detailed images of each vehicle. This is an example of how to present vehicles “on the web” as well as “on the forecourt”.

Car dealer linkmotorcityplymouth.co.uk

Best UK Car Dealer Websites Of 2014 - Motor City
Motor City Website


8. Jennings Motor Group – North East

Jennings Motor Group is a multi-award winning franchise group based up in the North East, with over a century over success behind them. Their website reflects this success, with a very polished and seamless design that offers visitors an impressive environment to browse stock, and immediately recognise the prestige of this established brand. Vehicle stock is so easy to search and refine, with information about each item displayed cleanly. Overall, one of the best websites I have found!

Car dealer linkjenningsmotorgroup.co.uk

Best UK Car Dealer Websites Of 2014 - Jennings Motor Group
Jennings Motor Group Website


9. Sutton Park Group – West Midlands

Sutton Park Group, established in 1991, are franchised dealers situated across the West Midlands. Their website was a pleasure to find with a clean and fresh looking design, and the integration of the pink and blue logo colours are used as subtle navigation aids and calls to action. With stock listings only one “click” away, visitors can instantly view what is on offer.

Car dealer linksuttonparkgroup.co.uk

Best UK Car Dealer Websites Of 2014 - Sutton Park Group
Sutton Park Group


10. Smiths Motor Group – Peterborough

Smiths Motor Group is a multi-franchise family business, built upon over 70 years of success in the motor trade. Their website brings a more “minimal” look, with lots of eye-pleasing “white space”, and very easy to find navigation and functionality. Visitors are presented with a constant search facility, meaning a refined browse of stock is only a few clicks away.

Car dealer linksmithsmotorgroup.co.uk

Best UK Car Dealer Websites Of 2014 - Smiths Motor Group
Smiths Motor Group Website


11. John Bank Group – East Anglia

Reviewing so many used car dealer websites around the web, you quickly learn how to distinguish the best examples. John Banks Group website is one of those examples. Pleasing gentle colours with plenty of “white space” on the pages, and a consistent simple navigation bar across the top. This is great example of an “easy to view” website.

Car dealer linkjohnbanks.co.uk

Best UK Car Dealer Websites Of 2014 - John Banks Group
John Banks Group Website


12. Murketts Vauxhall – Cambridge

With sites all over East Anglia, Murketts Vauxhall is a family owned group with more than 100 years of experience in delivering quality new and used vehicles. The Murketts website is polished and easy to navigate, allowing visitors to refine their searches. I particularly liked when viewing available vehicle models, you see a little picture of each model. This is great little touch to help customers who may not be familiar with the different vehicle models, pick the right one.

Car dealer linkmurketts.co.uk

Best UK Car Dealer Websites Of 2014 - Murketts Vauxhall
Murketts Vauxhall Website


13. Phoenix Car Company – Glasgow

From humble beginnings beside Glasgow airport, Phoenix Car Company has grown into one of central Scotlands largest dealer groups with multiple sites and franchises in Paisley, Glasgow, Grangemouth and Stirling. Their website is rich in media  and beautiful layouts, and very easy to explore with stock listings only one click away. Also featured is a very easy-to-use finance calculator, which also acts as a search function where visitors can select the payment options they desire, and are presented with vehicle options that suit their budget! Now agreed, other websites may offer such a facility, but it was the ease of finding and using this facility which appealed to me. A nice touch!

Car dealer linkphoenixcar.co.uk

Best UK Car Dealer Websites Of 2014 - Phoenix Motor Company
Phoenix Motor Company Website


14. Bridgend Motor Group – Ayrshire

I liked this website! Bridgend Motor Group present themselves on the web with a unique “quirky” stylised website. What do I mean by that exactly? Well. The layout and calls-to-action are simple and bold, with eye-pleasing soft colours, and some very cool historic photos of the business in the early days. Old “grainy” black and white photos are fantastic to look at and admire, and really give visitors a sense of how experienced Bridgend Motor Group are. Scroll down a little, and the visitor is presented with lots of visual queues to explore stock, and find the vehicle they want. Manufacturers logos, different types of vehicle shapes and sizes are all presented for the user to “click on” and find out more. It’s a great feature especially in this age of big screen tablets and smartphones where users scan the website looking for the next button to “press”.

Car dealer linkbridgendgroup.co.uk

Best UK Car Dealer Websites Of 2014 - Bridgend Motor Company
Bridgend Motor Company Website


15. Nathaniel Cars – South Wales

Nathaniel Cars based in South Wales boasts an excellent virtual forecourt. With slick modern dynamic layouts, this site is a joy to scroll through and explore. The key word here is “dynamic”. Did you know that soon, almost 50% of all web traffic will be mobile based? Meaning smartphones, tablets, and netbooks?  How a website looks on a smartphone, can be very different to how it looks on a desktop computer screen, and Nathaniel Cars have addressed that situation with a beautiful “scrolling” website that adjusts for mobile visitors, and looks great on mobile devices.

Car dealer linknathanielcars.co.uk

Best UK Car Dealer Websites Of 2014 - Nathaniel Cars
Nathaniel Cars Website


16. Lings Cars – Gateshead

And finally. Now granted that Lings is not a used car dealer and instead specialises in car leasing, in the motor trade there can not be a more extravagant and amazing website as Lings Cars. Following success in the TV show Dragons Den, Ling Valentine now runs a hugely popular vehicle leasing business with a reputation for colourful, and very funny loud marketing. With so much to “look at” on the website including animated chickens and dancing karaoke singers, you can’t help but stare and discover everything that is on offer!

Lings Cars websitelingscars.com

Best UK Car Dealer Websites Of 2014 - Lings Cars
Lings Cars Website


Thank you for reading this post about 16 of the best UK car dealer websites 2014. Please share and comment below!
Header Image Credit: Harry_NL via Flickr

Read Expansion With Suzuki and Hyundai

Read, a Hyundai dealer based in Grimsby has moved to new premises, and also added the Suzuki franchise to it’s portfolio.

Moving the Hyundai side of things to a larger showroom at Hewitts Business Park in Humberston, it has also introduced a Suzuki franchise into its original home Railway Street in Grimsby.

Managing director Mike Read informed the Grimsby Telegraph the new premises has a larger showroom with space to display eight Hyundais, double the size of the previous site, and the workshop includes a class-seven MOT ramp for LCVs.

Read said the move to Humberston had been in the pipeline for almost two years, and expansion has created 10 new jobs which is great news for the local job market.

Mike Read created the business in March 2010 when he took over the Phillip Middleton franchise in Railway Street in Grimsby, before opening Read Hyundai here in Lincoln.

Thank you for reading this post. Please share and comment below!
Header Image Credit: Rocking Cars via Flickr