Offering extended warranties is often a sign from an OEM that you can trust they have confidence in the products they sell. This was the sentiment offered by Paul Cannan from All Access in Queensland.
“I was impressed that an OEM would offer extended warranty. That speaks volumes about Haulotte that they are willing to back their product for 5 years” said Paul.
Fixed Costs vs unknown costs
When purchasing a major asset it’s owners calculate the total cost of ownership of the machine, not just the capital expense. Costs such as servicing, breakdowns and running costs, should be considered over the life of the machine. That is where an extended warranty can offer significant cost savings. Purchased with the machine, the costs are fixed for the period of the warranty. Variable costs such as fuel, labour, shipping etc are locked in with some levels of the warranty contract. This makes budgeting significantly easier as there is no need to estimate what potential breakdowns and services could cost. All Access considered these costs when deciding to add an extended warranty to their machines.
“With our extended warranty we can calculate the cost of ownership of each machine because the extra warranty is a fixed cost. When you aren’t covered by warranty you must keep a slush fund and you could get an unplanned $15,000+ expense without notice”, adds Paul Cannan.