Interview with Axel Berger, CarGarantie for AUTOHAUS
The electric car has not arrived on the mass market yet. But its numbers on German roads are increasing. This leads to more and more vehicles on the used car market, too. A case for warranty providers? AUTOHAUS spoke with Axel Berger, CEO of CG Car-Garantie Versicherungs-AG.
Mr. Berger, according to studies, maintenance and repair costs for electric vehicles are about 35 percent lower than those of a comparable vehicle with an internal combustion engine. Is there still a market for used car warranties?
Yes, of course. Especially considering reduced maintenance and repair costs in the dealership, an instrument to maintain customer loyalty is needed. Equipping an e-vehicle with a warranty is a good solution for this.
A warranty serves to protect the customer from unexpected repair costs. Can it increase the attractiveness of an electric motor – a technology that is still met with scepticism – and thus help boost sales?
For many potential buyers, the inhibition threshold of buying an electric car is still very high due to a lack of experience with it. A warranty that is both a quality statement and a protection against repair costs can certainly lower this threshold. It is therefore not only a good measure, but should also be marketed accordingly to generate more vehicle buyers.
Electric cars are simpler in construction, have less wear parts, longer life span and need less maintenance than conventionally powered cars. What does this mean for a used car warranty? How do you calculate prices?
If your predictions come true, this would be reflected in the calculation and lead to reduced prices for warranty premiums.
However, we cannot positively confirm such a tendency on the vehicles currently in liability with us. More representative data is needed for a reliable assessment. In general, our calculations are based on specific evaluations of our vehicle inventory and are made individually for each brand, vehicle type and output.
What role does the battery play – one of the most expensive components?
One has to look at the overall picture. To assess this reliably, it is crucial to observe how the residual values will evolve in the future when more vehicles are on the market. However, we are currently in the process of building up a long-term warranty programme for this sensitive component. But due to the lack of long-term experience this is a very complex topic.
Can you imagine a separate battery protection?
We can imagine that very well. But for this, some things still need to be clarified in general, e.g. what is the official definition of when a battery is considered defective - at 50, 60 percent remaining load capacity or already at 70 percent? This is very important for the development of a new product.
Do you already offer a specific warranty product for e-cars? What does this look like?
Yes, we are already on the market with some products. For example, in Austria we are realising the value package for the E-smart with Mercedes-Benz. This value package extends the factory warranty by a further two years and covers all electrical components and the battery.
Are there special requirements that car dealers have to meet?
Due to lack of long-term experience, we evaluate the e-warranty as a pilot market for us. Therefore, we look at each request individually and evaluate it.
Since when are you on the market with the warranty?
We introduced the e-warranty three years ago. As this is a new car extended warranty, these vehicles are now in liability, so we are very curious on how damages develop.
For dealers and workshops warranties above all mean customer loyalty. Do e-cars have the same time intervals for inspection as conventional cars?
Although the maintenance of e-cars is different from conventional cars, you can never do without maintenance work generally. Traditional inspection is also very important here to ensure that all functions are in perfect condition. Likewise, these are performed to maintain the manufacturer's warranty and the sales value of a vehicle. In general, the time intervals are slightly longer than for vehicles with an internal combustion engine.
Electric cars - especially in the used car market - are still a niche phenomenon. Which market development do you expect?
We will see whether the expectations of the manufacturers are met as predicted. What is certain, however, is that advancements in technology are steadily increasing the proportion of these vehicles on the market.