Longer warranty is not the answer to more sales according to Nissan, five years is good enough

Nissan Australia is happy keeping its warranty offering at the industry standard of five years/unlimited kilometres, stating that a longer assurance period does not correlate with increased sales.

Speaking to CarsGuide, Nissan Australia boss Stephen Lester said the brand will not bump up its warranty to match Kia’s seven years or Mitsubishi’s 10-year period because it doesn’t have “much of a particular impact on any brand’s volume”.

“We see a lot of consumers and a lot of the data, whether it is seven- or 10-year warranty, not really having much of a particular impact on any brand’s volume in particular, and I think at some point it just wears out that you’re paying for costs that’s never really materialising into anything,” he said.

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“We want to look at how we can address how consumers want to purchase vehicles into the future more closely than how we can have them keeping an individual vehicle for a longer period of time.

“A key part of that though is helping increase your residual values, so the more value you can put back in then the more likely a consumer is to return to you.”

To that end, Nissan rolled out its guaranteed future value (GFC) program called Nissan Future Value around two years ago, which locks in a vehicle’s buyback figure after a loan expires.

Similar to other GFC schemes from other brands – including Mazda, Volkswagen, Toyota, Mercedes-Benz, Audi and BMW – Nissan Future Value is designed to give customers more clarity on their vehicle’s worth, allowing them to make a easier decision to upgrade or retain the vehicle.

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“I think the way consumers are purchasing vehicles is going to continue to change quite dramatically, so we came out with Nissan Future Value, and since that time, this has become a really integral part of our program offering,” Mr Lester said.

“You’re seeing customers take vehicles on roughly a four-year term, and then returning that vehicle and purchasing something else.”

So, while a longer warranty period would give customers piece of mind, Mr Lester said Nissan is applying a more holistic approach to try and retain buyers, and a longer offering remains off the table for now.

“We’ve run seven-year warranty for a long time on Pathfinder, we didn’t see any major or significant uptick in interest,” he said.

“Consumers, of course, are appreciative of it, it’s transferable, that sort of stuff, but I haven’t seen any of the other brands really do any wonder in terms of their volume with the warranty play, and certainly the one that’s been most recent, there hasn’t been an ounce of change in my mind when you look at the numbers.”