Simon Tennyson, managing director of AA Warranty, said: “4x4s haven taken a hammering. RVs are dropping across the board but especially for 4x4s.” Tennyson said dealers should encourage customers to protect the invoice price of their vehicle rather than settle for the value at the time of a claim in the event of a write-off. “Customers need to be looking at Gap,” said Tennyson. He said dealers should strive to sell more add-ons in the current economic climate with both new and used sales coming under pressure and customers keen to avoid any unexpected financial outlays that could result from lack of cover. “Now’s the time to get this right, customers need more protection,” he said. “If the product is explained correctly, dealers should be able to sell more warranties now.” But despite fears of an impending recession, which Tennyson believes have been whipped up by the media, he claimed AA Warranty had not experienced a downturn. “We’re holding our position in terms of profitability,” he said. However, Tennyson said AA Warranty had seen an increase in the number of claims in recent months – possibly because customers are less willing to fork out on minor repairs to protect no claims bonuses. He said it was possible the pricing of products could be put under pressure if more claims continued to be paid out. Tennyson suggested AA Warranty could benefit from car buyers opting for older vehicles. “If they buy older cars we can sell products on them,” he said. The average age of cars covered by AA Warranty is five years and the average length of cover is 14 months. AA Warranty has a client base of 1,000 dealers – mostly comprised of larger independent businesses. Tennyson said the company’s biggest client sells 3,600 used cars a month. Since the onset of the credit crunch, he claimed only two of its clients had fallen into administration, which could be attributed to the rigorous credit checks AA Warranty subjects its clients to.