Marketing Service Contracts in the Service Lane: An Easy Way to Boost Revenue
This should go without saying, but vehicle sales are not the only significant source of income at your dealership. In fact, most dealers work hard to make sure their fixed operations, and specifically their service departments, are important contributors to their overall revenue and dealership profitability. Service contracts and extended warranties can play an important role in dealership profitability, but they’re typically marketed only at vehicle closings through the Finance & Insurance department. Let’s take a closer look at how presenting these opportunities in your service lane can boost revenue.
Extended Warranties vs. Service and Maintenance Contracts
The first thing to note is that while “extended warranties” are often referred to as “service contracts,” they are two different things. A service contract is not a warranty as defined by the Federal Trade Commission. “A service contract may be arranged at any time and always costs extra; a warranty comes with a new car and is included in the purchase price.” That might sound obvious, but it’s important to understand these differences, particularly if you represent extended warranty, service or maintenance contracts in the service lane.
Extended warranties are great options for clients who want to expand the protection of their vehicle against repairs that might be costly outside of warranty. Service and maintenance contracts, on the other hand, are oriented around preventive care and vehicle maintenance. Customers who are hoping to avoid issues with their vehicles altogether might be particularly interested in these types of contracts.
Customers do purchase service, maintenance and warranty contracts at vehicle closings, but there’s great — and often untapped — opportunity to sell these contracts in the service lane on a regular and recurring basis. Service advisors see more customers in a day than Finance & Insurance representatives see in a week or more. What’s more, eAdvisor makes the process very simple.
Using Service Lane eAdvisor to Boost Contract Sales
The right system creates greater sales opportunity. eAdvisor’s hands-free system auto-generates a vehicle service history, as well as VIN- and mileage-specific recommended maintenance reports, in less than 10 seconds. By the time the advisor has finished a multi-point inspection with the customer, the service report will have already been printed at the service advisor’s station. And, if you’re leveraging eAdvisor to its full potential, you’ll have also pre-populated your dealership’s extended warranty, service and maintenance contract pricing to review with your customer. Here’s how it works:
The advisor plugs the scan tool into the vehicle, which retrieves the vehicle data and wirelessly transmits it to the eAdvisor software.
eAdvisor submits the vehicle identification number, odometer reading and in-service date to see which vehicle service contracts may apply.
eAdvisor also checks the manufacturer’s report to see if the vehicle has an active service contract. If it does, eAdvisor does not print the report.
eAdvisor generates applicable reports, including the manufacturer’s report, DTC report, VIN and mileage-specific maintenance report, service contract eligibility report and tire report. All of these are automatically sent to the advisor’s printer, so the advisor can market the appropriate service contracts.
Expand Your Reach and Retention
As the average age of registered vehicles in the United States increases to an annualized 11.9 years, demand for extended warranty, service and maintenance contracts is sure to follow suit. It makes sense, then, to present customers with maintenance and repair solutions. Perhaps more notably, extended warranty, service and maintenance contracts may also help expand your services to harder-to-reach groups like the 18-34 age bracket.
Improve Your Service Lane, Improve Your Business
Find out more about what the Service Lane eAdvisor system can do to help you increase service lane efficiency and profitability. Reach out to us today for more information!