Benefits

Changes experienced in the automotive market over the last 4-6 years have dramatically improved the attractiveness for consumers of extending factory warranties and adding other protection products on automobiles. Car buyers are keeping their vehicles longer and average vehicle-financing terms are fast approaching 72 months with many new cars now financed for 7 years. Additionally, factory basic warranties have settled at an average of 3 years or 36,000 miles for most brands. All of these factors have increased customer acceptance of vehicle service contracts and ancillary insurance products.

To summarize, today’s car buyers see a need for additional protection for their vehicles, are willing to pay a premium for it, and are buying these Automotive Protection Products from car dealers and Internet sites. In this economy, consumers see value in shielding their already tight finances by protecting their automobiles and keeping them longer. Moreover, automobiles are increasingly built with more technology than ever before, much of which must simply be replaced rather than repaired when it breaks down, triggering significant increases in repair costs.

Today’s car buyers see a need for additional protection for their vehicles, are willing to pay a premium for it.

In the service contract industry, customers can purchase protection from two major sources. Their first option is the car dealer, which provides either a factory-backed product, or a non-factory, third-party-administered coverage. Sales success rates don’t vary much between factory and non-factory because the consumer’s trust in the dealership is what truly sells the product.

The current avenues for purchasing automotive protection products through dealerships and Internet sites are costly for the consumer.

The second option is unaffiliated direct-to-consumer marketing companies. These companies mass market to the public with no specific target design. They can at times offer lower-cost options than the dealers do, but with coverage that provides little or no protection for the consumer. U.S. Fidelis, for instance, had 600,000 policies in force before state regulators concluded their contract was a scam and forced them into bankruptcy. Although acceptance rates for this distribution model are low, the target market size (all car owners) makes it highly profitable for companies to continue this model. Even the bad press caused by U.S. Fidelis has not dissuaded even more companies from entering this market

Our partnership with large employers, unions and associations allows us to capitalize on the trusted relationship already present while minimizing distribution costs.

At Prime Source, we have created a marketing and distribution channel directly between these two major sources for vehicle service contracts and other automotive protection products. Our partnership with large employers, unions and associations allows us to capitalize on the trusted relationship already present while minimizing distribution costs. The combination of these two factors allows you to provide your employees and members with industry-best coverage at an unbeatable price. Your program can now be the alternative your members have to paying retail prices at the car dealership or rolling the dice with an Internet site.