Pre-Paid Service Plans give Retailers the Advantage.

Pre-paid and complimentary maintenance plans boost customer retention at auto dealership service departments. This is a realization as our generations of home auto repairman or weekend mechanics seem to be getting older and older.

Nearly three of five polled consumers with such plans say they are likely to continue servicing their cars at a dealership after their plans expire.

That compares with average dealer post-warranty retention rates of 22% to 40%, depending on vehicle make and age.

These programs can more than double service business that typically bleeds to the aftermarket.

“Everyone potentially is a prepaid maintenance customer,” says Jeremy Johnston, a finance and insurance manager who sells them at Suburban Ford of Sterling Heights, MI.

But the study indicates a minority of car buyers opt for the F&I add-on that covers oil changes, tire rotations and service not related to repairs.

The survey says 22% of car owners currently have a maintenance plan. Of those, 15% are complimentary plans such as  ToyotaCare, Experience Buick and BMW Ultimate Service, while 7% are purchased.

The plans seem to attract young car buyers. I agree with this.  Young car buyers haven’t typically worked on their cars or saw a parent work on their auto. These are the  Gen X , Y’s or  Millennial.

Car owners under age 35 are more likely to have a maintenance plan (31%) than those older than 35 (18%), the survey says.

Consumers age 25-34 show the highest level of satisfaction (84%) compared with all other age groups (62%).

Other study findings:

One in four customers still stray from the dealership while under a plan, indicating that dealerships still must actively seek to retain customers.
Consumers who do not have all service performed under the plan are significantly less likely to continue servicing at that dealership.
If dealers and auto makers believe they needn’t worry about keeping these customers close and satisfied until a plan expires, this data clearly shows that those beliefs need some revising.

A clear process that works in your service drive like the processes coached by Jack Lupo and Dealer Service Academy will help to maintain that client coming back. Service Teams have to maintain that communication whether it be texting phoning or emailing updates through out the day to there clients. Our clients want instant information.

A surprising 25% of people with free or pre-paid maintenance plans say they have only used them for some of their covered services. “That could reflect a lack of convenience typically associated with dealership service centers, but one we like to help correct.” Jack Lupo Dealer Service Academy says

 

The Study was performed by DME Automotive.

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