Dealers see ‘large uplift’ in service plan demand

New research from Motoring.co.uk shows that over the last 12 months, there has been a “large uplift” in the number of consumers that are considering service plans with franchised dealers.

This is due to car manufacturers and their dealer partners creating awareness of the benefits of using the franchised dealer for servicing and MOTs.

According to the research, consumers are 40% more likely to purchase a service plan agreement at point of sale if they are buying a new or used car and when picking the car up after a service or MOT.

Customers who are on service plans that match their finance or PCP term are also on average 25% more likely to purchase that brand from the same dealer again.

The Warranty Group said service plans and warranties are becoming an increasingly important customer retention tool as more car sales are essentially completed online.

With a growing number of customers only visiting a dealership once to collect their car, products that keep them coming back for maintenance and repairs are becoming essential, it said.

Ian Simpson, sales and marketing director, said: “The continuing growth in online sales means that the opportunity to get to know a customer and build a relationship with them over the course of a number of visits, when they choose and finance a car, is disappearing.

“In order to attempt to secure their future aftersales business and eventually sell them another car, you have to create a means of ensuring that you capture their future business, and warranties and service plans are the most obvious way of doing so,” he added.