For a price-conscious customer, TechCare coverage is a reasonable fallback from a full-coverage contract, said Rob Volatile, managing director at EasyCare. Consumers can easily equate the difficulties and expenses brought on by their smartphone breaking to the technology in their car, he said.
“Cars are more and more like rolling computers these days,” Volatile said, adding tech repairs are different from mechanical repairs because they typically involve full replacements that can cost thousands.
“That replacement is typically found at the dealership if they’re OEM parts, which then you have to ask yourself if you’re a consumer, ‘Do I want an OEM part fixing the tech in my car?’ The answer is going to be pretty much 100 percent yes,” Volatile said.
TechCare also was created with the future in mind, specifically increasing EV ownership, which Volatile notes often bring on consumer misconceptions about needed coverage. EasyCare reports EVs have more than 70 percent of components in common with gasoline-powered vehicles. Despite doing away with an engine, EVs will also need repairs, and TechCare is one way to customize it, Volatile said.
The adoption rate of TechCare has been slow, but in his 30 years in the finance and insurance industry, Volatile said its popularity is typical for a new product. He expects interest to significantly increase in the next six to eight months.
AUL Corp. also offers a tech-only service contract, which was launched in 2020 and aims to cover vehicle technology systems rather than individual parts, said Paul McCarthy, vice president of sales at Protective Asset Protection, which acquired AUL in May.
Launched following demand from dealers, AUL-Tech, like TechCare, is for the budget-conscious consumer who may be confident in vehicle mechanics but unsure about vehicle tech, McCarthy said. Prices vary greatly, but AUL-Tech can cost as much as 50 percent less than a full-coverage contract.
For some repairs, consumers think, “I could watch a YouTube video and I could fix this,” McCarthy said.
However, tech coverage is appealing because technology components are not only expensive but also not a do-it-yourself job, he said.
JM&A Group developed its technology service contract at the request of one of its largest dealer clients, said Chris May, director of product innovation and intelligence at JM&A. It’s selling well to that dealer’s clientele, but the tech-only product isn’t sold by most of its dealers, he said.
When dealers ask JM&A for product recommendations, the group suggests products with the highest consumer satisfaction rates, which are those with the most comprehensive coverage, May said.
Misconceptions about what a tech-only product covers can leave a consumer unsatisfied; however, May noted the group’s dealers who do sell it, sell it well.