Longer extended-warranty offerings are another sign that today’s vehicles are better made and owners hang on to them longer.

That and other reasons account for why Ally in March will start pilot-testing a new flagship product, Ally Premier Protection. It pushes ultimate extended-service coverage up to 12 years and 150,000 miles (192,000 km). That’s two years and 50,000 miles (80,000 km) more than before.

Ally’s increased maximum includes initial factory warranties. Hyundai offers the most generous of those: 5 years and 60,000 miles (96,000 km). Chevrolet, Toyota, Honda and Nissan offer 3-year/36,000 (57,600 km).

Vehicle quality has greatly improved over the years. Once, it was iffy a typical car would last 12 years. Back then, factory warranties didn’t exist, let alone subsequent extended versions.

Ally’s Premier Protection plan is a nod to today’s vehicle durability in one respect. But there’s also this: Although modern cars seldom die young, they don’t usually go through life without requiring some fixing of broken parts.

“With vehicles that are older, repairs come into play, as does the need for expanded coverage,” Doug Timmerman, president of Ally Insurance, tells WardsAuto.

“We’re introducing this product based on customer need and dealer feedback,” he says. “The market has changed as far as consumer wants and needs. Expanded coverage is needed when you look at the older, higher-mileage vehicles being sold and traded in.”

The product’s trial run will involve about 60 dealerships. A nationwide rollout is planned this summer.

A reason for the pilot program is to make sure the related technology works as well as expected, Timmerman says. “It fully integrates with the DMS (dealership-management system), which is unique as well.”

A technology platform called the Vehicle Protection Center was designed to make administering and managing contracts easy, intuitive and error-proof. The platform puts the dealership office, F&I and service managers in the loop for efficient claims processing.

Product developers also sought to clearly and transparently present the add-on offering to consumers whether they are learning about it online or during a dealership’s finance and insurance menu presentation.

“People will understand what they are buying, and whether this is something that works for their needs,” Timmerman says.    

Ally Premier Protection offers four levels of coverage ranging from basic to powertrain-only to the works.

Certain things aren’t covered, such as tires, body parts, wiper blades and charging units for electric vehicles. On the other hand, coverage includes virtually every high-tech component.

“People see all these vehicle-technology advancements, and start thinking, ‘Holy moly, what happens if something goes wrong there,’” Timmerman says. “The quality of vehicles is better. That’s all good. But it’s nice not to worry about something going wrong and having to pay $2,500 to repair it.”

Ally will offer the upgraded protection plan on new and used vehicles of virtually all makes and models. That aims to expand the brand’s insurance portfolio beyond General Motors, with which Ally is strongly associated.    

“It’s an opportunity to leverage our strong brand and to grow outside the GM space,” Timmerman says. “We’ve done a lot on that on the finance side. But until now, we haven’t really made the move on the insurance side. This fits perfectly.”

More than 5 million automotive consumers buy extended-service agreements annually.

F&I managers say customers vary. Some of them willingly buy F&I products. Others do so after effective sales presentations. Others refuse, no matter what.

Who is more likely to buy a service contract?

“It’s a wide range,” Timmerman says. “It can depend on how much someone has to spend.  Different credit scenarios come into play. And some people place more value on a service contract and the peace of mind it brings. Everyone has a different perspective.”

sfinlay@wardsauto.com