Automotive News F&I Special Sections of 2008 - (Page MAY34) 34 • MAY 5, 2008 The resilient dealer INSIGHT Prepaid plans spark service visits beyond oil changes Jenny King autonews@crain.com Dealer Bill Stasek says prepaid maintenance isn’t an especially profitable part of his business, but “it predisposes customers to coming back to us.” When Josi Brodbeck of Lake Zurich, Ill., bought a used 2000 Ford Explorer last year from Bill Stasek Chevrolet, her parents gave her a one-year prepaid maintenance plan from the dealership for Christmas. Brodbeck appreciated the gift: “I do like it. I can go to the dealership for anything I need; I don’t have to worry, and they know my car.” On the other hand, Detroit area painter Dan Koelzer walked away from his business purchase of a 2008 Dodge Grand Caravan without a prepaid maintenance plan. “I don’t re- member being offered one,” he says. That omission by Koelzer’s dealer may have been a missed opportunity. Selling customers prepaid maintenance plans can generate service business, some retailers say. The plans, available from many automakers as well as from insurance providers, generally cover such things as oil changes, tire rotations, items that wear down and sometimes transportation reimbursement. Some are transferable. Most can be worked into customer payment plans. Jeremy Stasek, of Bill Stasek Chevrolet in Wheeling, Ill., says sales of prepaid maintenance plans are brisk — especially plans developed by the dealership, which give the service departments more latitude than the stricter General Motors plans. Stasek, son of dealer Bill Stasek, says the dealership plans can cover a vehicle from one to five years. A typical one-year plan encompasses four oil changes, a tire rotation, a new air filter and a detailed 19-point inspection. It costs $185. Bringing ’em back Bill Stasek says the type of plan offered is often tailored to the deal. “With our lease vehicles, we may choose to offer a General Motors prepaid maintenance plan. For sales, our third-party plan may be better.” The senior Stasek says prepaid plans don’t generate a lot of profit for his business. “It’s a small part, but more importantly, it predisposes customers to coming back to us,” he says. Toyota has had similar results with prepaid auto care plans. In addition to maintenance, the two plans, classic and premium, offer roadside assistance with towing, tire changes, lockout protection and jump-starts. The premium package also covers Toyota’s recommended services in the scheduled-maintenance guide. The cost of the packages varies by store, says Kerry Rivera of Toyota Financial Services in Torrance, Calif. A recent service retention survey showed that 62 percent of Toyota Auto Care plan customers had five or more service visits, compared with 25 percent of non-Toyota Auto Care customers, Rivera says. Rivera says internal data show that Toyota Auto Care customers generated an average of $766 in additional labor sales for the dealership beyond the cost of the prepaid packages, compared with $383 for non-Toyota Auto Care customers. Rivera adds: “Typically, Toyota dealers see 10 to 11 percent Toyota Auto Care penetration on new Toyotas. However, many dealers see penetration percentages over 40 percent by choosing to offer TAC consistently and involving all areas of the dealership in the TAC process.” Maintenance contracts do keep customers coming back to the dealership, agrees Jeff Laethem, president of Ray Laethem Pontiac-GMC-Buick in Detroit and Richmond, Mich. “We created our own maintenance contract,” Laethem says. “It works well for lease vehicles. We can keep track of mileage as well as maintenance, and it helps us keep vehicle service records.” And vehicles cared for at the dealership are likely to become good tradeins. Just like the car business, banking is about relationships. I know I can rely on KeyBank. JIM BROWN - To learn how Key AutoFinance solutions can help strengthen your dealership, call 1-888-288-6539 or visit key.com/KAFdealer. Used cars, too The process is attractive to usedvehicle stores, too. Advantage Certified Auto Group, a dealership specializing in selling and servicing preowned BMWs in Manassas Park, Va., is about to launch its own prepaid maintenance plan. Advantage co-owner and partner Bill Moss thinks he will make it available to customers beginning in midJuly. A two-year maintenance plan is likely to cost $1,800 to $2,500, depending on the vehicle model, he says. Says Moss: “We figure by the 18th month of a plan, three out of four customers will still be using it.”c http://www.key.com/KAFdealer http://www.key.com/KAFdealer
Table of Contents Feed for the Digital Edition of Automotive News F&I Special Sections of 2008 Automotive News F&I Special Sections of 2008 Automotive News F&I Special Sections of 2008 - (Page Cover1) Automotive News F&I Special Sections of 2008 - (Page JAN18) Automotive News F&I Special Sections of 2008 - (Page JAN19) Automotive News F&I Special Sections of 2008 - (Page FEB70) Automotive News F&I Special Sections of 2008 - (Page FEB71) Automotive News F&I Special Sections of 2008 - (Page FEB72) Automotive News F&I Special Sections of 2008 - (Page FEB73) Automotive News F&I Special Sections of 2008 - (Page MAR20) Automotive News F&I Special Sections of 2008 - (Page MAR21) Automotive News F&I Special Sections of 2008 - (Page APR30) Automotive News F&I Special Sections of 2008 - (Page APR31) Automotive News F&I Special Sections of 2008 - (Page JDB2) Automotive News F&I Special Sections of 2008 - (Page MAY25) Automotive News F&I Special Sections of 2008 - (Page MAY26) Automotive News F&I Special Sections of 2008 - (Page MAY27) Automotive News F&I Special Sections of 2008 - (Page MAY28) Automotive News F&I Special Sections of 2008 - (Page MAY29) Automotive News F&I Special Sections of 2008 - (Page MAY30) Automotive News F&I Special Sections of 2008 - (Page MAY31) Automotive News F&I Special Sections of 2008 - (Page MAY32) Automotive News F&I Special Sections of 2008 - (Page MAY33) Automotive News F&I Special Sections of 2008 - (Page MAY34) Automotive News F&I Special Sections of 2008 - (Page MAY35) Automotive News F&I Special Sections of 2008 - (Page MAY36) Automotive News F&I Special Sections of 2008 - (Page MAY37) Automotive News F&I Special Sections of 2008 - (Page MAY38) Automotive News F&I Special Sections of 2008 - (Page MAY39) Automotive News F&I Special Sections of 2008 - (Page MAY40) Automotive News F&I Special Sections of 2008 - (Page MAY41) Automotive News F&I Special Sections of 2008 - (Page MAY42) Automotive News F&I Special Sections of 2008 - (Page JUN24) Automotive News F&I Special Sections of 2008 - (Page JUN25) Automotive News F&I Special Sections of 2008 - (Page JUL26) Automotive News F&I Special Sections of 2008 - (Page JUL27) Automotive News F&I Special Sections of 2008 - (Page AUG32) Automotive News F&I Special Sections of 2008 - (Page AUG33) Automotive News F&I Special Sections of 2008 - (Page SEP30) Automotive News F&I Special Sections of 2008 - (Page SEP31) Automotive News F&I Special Sections of 2008 - (Page OCT48) Automotive News F&I Special Sections of 2008 - (Page NOV26)
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.