Assurant data is mixed on the potential for higher service contract penetration among electric vehicle shoppers.
The finance-and-insurance product provider's 2022 Electric Vehicles Consumer Sentiment Survey found 63 percent of battery-electric vehicle owners bought an extended warranty.
"This is significantly higher than the attachment rate for a gas-powered vehicle, which is usually in the mid-40 percent range," Assurant wrote.
But Assurant Global Automotive President Martin Jenns told Automotive News real-world data from a broader consumer pool finds EV finance-and-insurance product penetration lagging about 4 percentage points behind internal-combustion vehicles, though he cautioned not to read too much into this difference. Attachment rates should be thought of as similar, Jenns said.
But Jenns said he felt incorporating battery protection would help EV F&I product sales.
"I think the reason that you haven't seen it be fully or aggressively adopted [among F&I providers] is because there's not been enough data to support it," he said.
Sixty-nine percent of the EV owners with an extended warranty were buying such coverage for the first time, according to the Assurant sentiment survey. Assurant said this result suggested concerns about the cost of EV repairs.
"I don't know that we're seeing it quite that high in our real-world numbers," Jenns said. But he said the result wasn't a surprise because customers had an "uncertainty" about EV ownership.
Assurant's sentiment study also identified a price ceiling for prospective EV owners. Among respondents without an EV, 57 percent said they would expect to pay $30,000 or less for the vehicle.
The good news for F&I offices: Jenns said he felt that ceiling would apply only to the vehicle itself. A consumer who bought an EV at their $30,000 price ceiling would still be willing to tack on additional charges for F&I products.
"Generally speaking, the purchase price is independent of what ultimately gets purchased in the F&I office," Jenns said.
