Why Service Departments Need Prepaid Maintenance Plans

Most car dealerships sell prepaid maintenance plans to their customers. And with good reason — about 75-90% of customers renew these plans, and this can lead to an average increase in repair order revenue from upsells of $70 per visit.

Prepaid maintenance plans will usually include oil changes, tire rotations, and other basic services. They’re a great way for the dealership to increase customer loyalty, and provide the customer with discounted rates and the confidence their vehicle will be taken care of.

Most of these prepaid maintenance plans are sold through the F&I department, which typically only interacts with customers when they’re purchasing a vehicle. But the service department can be a dealership’s secret weapon in selling far more of these profitable plans.

When you sell prepaid maintenance packages through the service department you get many more opportunities to sell the benefits – unlocking a whole new revenue stream for your dealership.

That said, you can’t just use the same packages for your service department as you do in the F&I department: they need to be treated differently because the buying behavior is different. Read on to learn more about how these programs can benefit your dealership, and how to sell prepaid services effectively from your service department.

The benefits of selling prepaid maintenance plans to your customers

Before we dive in, here’s a quick recap on why you should emphasize prepaid maintenance plans at your dealership if you aren’t already.

• Prepaid plans increase customer loyalty — working with some of our clients, we’ve recorded an 18-24% increase in retention compared to those without prepaid packages. Our client research shows that for successful dealerships, the penetration rate of prepaid maintenance packages results in 2 out of every 3 oil changes performed in the service department are for customers who have a prepaid package.
• Prepaid plans increase customer satisfaction — vehicle owners not only get a discounted rate by prepaying, but by seeing them more often you get the chance to catch small problems before they become big ones.
• Prepaid plans increase vehicle sales — customers are twice as likely to purchase a vehicle from you if they’ve received service from you in the past year. By getting a pre-commitment to maintenance, you decrease your odds of losing them to another dealership when they’re ready to purchase their next vehicle.

Pro Tip: promoting prepaid maintenance is the perfect time to inform customers of your dealership’s tire capabilities, because tire service is a major defection point that loses customers. Our studies have shown that nearly a quarter of customers are not aware their dealership sells tires, and 69 percent of respondents in our last study went somewhere other than a dealership the last time they needed one or more tires replaced.

How dealerships can sell prepaid maintenance plans more effectively in the service department

Anyone can be successful selling prepaid maintenance on the service side, but you have to treat it differently than the prepaid maintenance sold in the F&I department.

Usually F&I sells prepaid maintenance (PM) for the life of a vehicle loan, allowing customers to include the plan’s price with the cost of the loan. These are usually comprehensive packages and are more expensive, which means selling that same package in the service drive is going to be a challenge.

So how should a prepaid maintenance plan in the service center be different than selling through F&I? You can think of the differences this way: short, simple, and sweet.

• Shorter duration — a good service department prepaid maintenance package should only include 3-4 services, and should be valid for no more than 18-24 months
• Simpler offerings — make the offer accessible to as broad a customer base as possible: include oil changes, tire rotations, and any commonalities that any of your models have. If you start trying to customize the plan for different models and years of vehicles, it gets complicated very quickly because different vehicles have different needs.
• Sweeter deals — there are two ways to sweeten the deal. One way is to offer a more competitive price (customers need a financial incentive to prepay their oil changes in bulk). Alternatively, you can include additional value. With DriveSure for instance, you can offer a unique suite of renewable benefits that your customers will rave about.

Setting up service-led prepaid maintenance with DriveSure

DriveSure makes it easier to offer prepaid maintenance plans from your service department. We help you design a program and set your own pricing (with some consultation), all while making it simple for any admin and marketing staff member to handle prepaid maintenance tasks.

This means package sales and redemptions won’t become a hassle for your team. Since we also handle the administrative side of the program, you don’t need to worry about sending contracts, tracking enrollments, liabilities, expiration dates, or customer communications.

Not only does DriveSure make it easier to offer prepaid maintenance plans from your service department, it also gives you the option to offer extra value to improve your customer loyalty, through a suite of renewable benefits.

DriveSure works with your DMS, so it integrates the benefits enrollment process into the prepaid maintenance redemption process. This lets you quickly renew a customer’s DriveSure benefits each time they come in to redeem a prepaid service. (To keep things simple, these benefits are not sold as part of the prepaid maintenance purchase itself, but are provided on a complimentary basis upon redemption of a service).

To make it easy for the customer, we give you service sticker templates with custom QR codes for each vehicle, providing several benefits for each customer: Digital Roadside Assistance capabilities, the ability to schedule service, and a tracker to show how many prepaid maintenance redemptions they have remaining. This last feature allows both the customer and the service advisor to easily see the count.

With services like these, DriveSure helps you provide substantial value to your customers, giving them strong reasons to keep coming back to you for service. From making it easier to provide enticing prepaid maintenance packages in your service drive, to increasing customer loyalty overall, we’re here to help — all without any extra demands on your time.