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Survey Reveals Reasons Consumers Forego Purchasing Extended Automotive Warranties Despite Seeing Value

Results uncover opportunities for automotive manufacturers, their captive finance divisions, and dealers to help consumers protect their purchases and encourage long-term loyalty and profitability

CAMBRIDGE, Mass. – December 10, 2018 – Pegasystems Inc. (NASDAQ: PEGA), the software company empowering digital transformation at the world’s leading enterprises, today announced the results of a new survey that revealed the majority of drivers (63 percent) do not have active extended warranties despite seeing their value. In fact, 60 percent agreed warranties provide value and 62 percent of consumers with active warranties report benefitting from them within the past year. Results also uncovered how manufacturers, their captive finance division (i.e. captives), and dealers need to work together to create transparent experiences that encourage customer loyalty. 

A Pega-commissioned survey of more than 1,000 US-based consumers revealed aftermarket buying habits and opinions – including satisfaction and warranty perceptions. The survey uncovered why consumers are driving vehicles without extended warranties, as well as the factors that leave a customer satisfied after making an automotive purchase. To better protect customers’ purchases and drive loyalty, dealers, manufacturers, and captives need to understand what helps customers remain happy with their purchasing experience – both in the near- and long-term.  

Why are so many consumers driving without extended warranties?
The survey results reveal a clear disconnect between appreciating the importance of an extended warranty and actually purchasing one. The biggest barriers to consumers purchasing a warranty are: cost (35 percent), not thinking they need one (32 percent), and lack of availability at the time of purchase (29 percent). Furthermore, nearly half of those surveyed (48 percent) only somewhat understand their existing manufacturer’s warranty, and seven percent say they don’t understand it at all. It’s imperative that manufacturers and dealers understand these factors to better educate buyers and provide appropriate recommendations on how they can protect their vehicle purchases, as well as what’s included with that protection.

Understanding generational differences
While it’s important to understand why people do or do not purchase extended warranties, dealers also should understand who is making these purchases and how they can provide more personalized recommendations. Younger consumers are the primary buyers: 54 percent of 16-24-year olds have an extended warranty, while only 25 percent of those 55 and up have an extended warranty. 
Generational differences also surfaced when respondents were asked how well they understand their existing manufacturer’s warranties. Nearly 40 percent of 16-24 year olds said very well, while only 22 percent of those 65 and older said the same. By understanding buyers’ needs on an individual level, manufacturers, their captives, and dealers can provide better education on the warranty options that will provide the most benefits.

A collaborative approach to creating more loyal customers
When it comes to loyalty, 54 percent of those surveyed are loyal based on a past experience with an auto brand, and 47 percent are loyal because of a positive experience with a dealership. Only 28 percent answered they are loyal because of price or vehicle performance, revealing just how much rides on the combined experience the manufacturer and dealership provide. A strong product combined with a quality in-person dealership experience are almost equally responsible for a customer coming back.

Another opportunity for manufacturers, their captives, and dealers lies in vehicle data sharing. Fifty-four percent of respondents either agree or strongly agree that they see value in a connected app experience using data from their vehicles to enhance the overall in-vehicle experience. However, many (45 percent) remain concerned about how their data will be exploited, so manufacturers, captives, and dealers must use this data in the right way.

Combined with product quality, a key element consumers look for in aftermarket experiences is transparency – whether it’s transparency from a dealer on what a warranty covers or how to purchase one, or transparency about how their data is used for better in-vehicle experiences. 

To learn more about how to create better ownership and user experiences, and aftermarket value, visit  

Quotes and Commentary

“When it comes to aftermarket owner and user experiences, there is an urgency for auto manufacturers, their captive finance divisions, and dealer partners to intelligently orchestrate the fragmented channels, processes, decisions, and data necessary to cultivate more loyal customers – whether it’s helping consumers with extended warranty purchases or providing more seamlessly-connected ownership and user experiences,” said Steven P. Silver, vice president, industry market leader - manufacturing, Pegasystems. “By understanding buyers’ experiences on a deeper level, the industry can provide more personalized recommendations and effortless interactions that protect customers’ automotive purchases long-term, as well as better experiences every time consumers use their vehicles and dealers service them.”

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Lisa Pintchman
VP, Corporate Communications
[email protected]
+1 617-866-6022

North America

Sean Audet
Director, Corporate Communications
[email protected]
+1 617-528-5230

Ilena Ryan
Sr. Manager, Public Relations
[email protected]
+1 617-866-6722


Joanna Richardson
Director, Corporate Communications
[email protected]
+44 (0) 118 9651 660

Jon Brigden
PR & Communications Manager
[email protected]
+44 (0) 118 9398 584

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