Fixed Ops Journal - April 2018 - F33

FIXED OPS JOURNAL

PREPAID
continued from Page 32

average repair order of $86, Williams estimates.
Fidelis provides prepaid plans to about 800
U.S. dealerships and dealership groups. The
company charges its dealership customers a
one-time setup fee of $499 for prepaid plans,
plus $199 for each additional store.
Fidelis also collects a fee for each plan a
dealer sells. That amount varies, Williams
says, although another Fidelis official estimates it averages $30 per consumer.
Sixty percent of new- and used-vehicle owners buy a Fidelis plan, its dealers report. And
about 70 percent of those buyers return to the
dealership for service after the plan expires,
Williams says.
"Forty percent of all our dealers do a complimentary giveaway of a one- or two-year
plan," Williams adds.
Paradise Chevrolet-Cadillac in Temecula,
Calif., includes a lifetime oil-change plan with

each new and used General Motors brand vehicle it sells. The plan is good for as long as the
buyer owns the vehicle but cannot be transferred to a new owner.
Service Manager Doug Ritchey says the
dealership typically charges $80 for an oil
change using synthetic oil and for related services, making the plan valuable.
Mike Armstrong, the dealership's service director, adds: "We sold 800 vehicles with lifetime oil-change plans in December. It has
been a huge retention tool for us."
Keffer Chrysler-Jeep-Dodge-Ram in Charlotte, N.C., gives new- and used-vehicle buyers
coupons for two free oil changes at the dealership to encourage them to buy prepaid maintenance plans offered by Mopar, the service
organization of Fiat Chrysler Automobiles.
One popular plan charges $129 for four oil
changes over two years, with semisynthetic oil
and filter, says A.J. Bitterman, the dealership's
fixed operations director. The dealership generally charges $55 for a single oil change, he
says.

Bitterman notes that the dealership pays FCA
$120 for the two-year plan. "We don't mark the
[prepaid plans] up much," he says. "For us, they
are more important as retention tools."
Nearly 40 percent of customers buy the twoyear prepaid oil change plan from the dealership, Bitterman says.
A good experience with a dealership's service department can build trust and result in
repeat visits, O'Reilly of Western Michigan
University says. But that may not encourage
vehicle owners to pay upfront for services
down the line, she adds.
And the potential exists for a customer service headache, she warns, if buyers of prepaid
maintenance plans want their money back after a poor service experience.
Williams of Fidelis says prepaid maintenance makes such complaints less likely, "as
customers come in much more frequently
and real relationships are forged."
"With our millions of claims and services
performed," he says, "I am not aware of [a refund demand] ever happening." 

APRIL 2018

PAGE 33


http://www.broadwayequipment.com

Table of Contents for the Digital Edition of Fixed Ops Journal - April 2018

Contents
Fixed Ops Journal - April 2018 - Intro
Fixed Ops Journal - April 2018 - F1
Fixed Ops Journal - April 2018 - F2
Fixed Ops Journal - April 2018 - Contents
Fixed Ops Journal - April 2018 - F4
Fixed Ops Journal - April 2018 - F5
Fixed Ops Journal - April 2018 - F6
Fixed Ops Journal - April 2018 - F7
Fixed Ops Journal - April 2018 - F8
Fixed Ops Journal - April 2018 - F9
Fixed Ops Journal - April 2018 - F10
Fixed Ops Journal - April 2018 - F11
Fixed Ops Journal - April 2018 - F12
Fixed Ops Journal - April 2018 - F13
Fixed Ops Journal - April 2018 - F14
Fixed Ops Journal - April 2018 - F15
Fixed Ops Journal - April 2018 - F16
Fixed Ops Journal - April 2018 - F17
Fixed Ops Journal - April 2018 - F18
Fixed Ops Journal - April 2018 - F19
Fixed Ops Journal - April 2018 - F20
Fixed Ops Journal - April 2018 - F21
Fixed Ops Journal - April 2018 - F22
Fixed Ops Journal - April 2018 - F23
Fixed Ops Journal - April 2018 - F24
Fixed Ops Journal - April 2018 - F25
Fixed Ops Journal - April 2018 - F26
Fixed Ops Journal - April 2018 - F27
Fixed Ops Journal - April 2018 - F28
Fixed Ops Journal - April 2018 - F29
Fixed Ops Journal - April 2018 - F30
Fixed Ops Journal - April 2018 - F31
Fixed Ops Journal - April 2018 - F32
Fixed Ops Journal - April 2018 - F33
Fixed Ops Journal - April 2018 - F34
Fixed Ops Journal - April 2018 - F35
Fixed Ops Journal - April 2018 - F36
Fixed Ops Journal - April 2018 - F37
Fixed Ops Journal - April 2018 - F38
Fixed Ops Journal - April 2018 - F39
Fixed Ops Journal - April 2018 - F40
Fixed Ops Journal - April 2018 - F41
Fixed Ops Journal - April 2018 - F42
Fixed Ops Journal - April 2018 - F43
Fixed Ops Journal - April 2018 - F44
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