Electric Vehicles (EV) continue to grow in popularity. Owners want to guard these investments, and dealerships want to protect their customers from costly repair bills. For that reason, they partner with F&I product and service providers to offer EV auto service contracts.

So, if your dealership sells EVs, you must understand how these service contracts benefit the customer and why your customers need them.

Before reviewing reasons to offer these protection plans, let’s discuss the various types of service contracts and who exactly provides this coverage. You’ll also learn what’s an EV auto service contract covers. Let’s get started.

Types of Electric Vehicle Service Contract 

There are a few primary types of service contracts offered by a dealership. Whether your dealership sells new cars or used ones, you’ll want to set your customer up with one of these protection plans. Some plans even cover motorcycles, ATVs, UTVs, RVs, marine vehicles — and especially EVs.

What’s included in an EV auto service contract? Here are a few basic parts and services covered:

  • Electrical and Mechanical
  • EV Battery Packs 
  • Roadside Assistance
  • Free Towing
  • Ride-share Coverage
  • Nationwide Acceptance

Here are the different types dealerships sell:

New or used

It makes sense that you would sell an EV auto service contract to someone who purchases a new car. But have you considered that EVs are already being sold as used cars?

Used and aftermarket parts for EVs are still in the infancy stage. So, when a customer purchases a used EV, they want to know they will get quality replacement parts.

Not only can you sell a service contract for new EVs. You can sell EV auto service contracts for used cars.

Many people didn’t know you could buy a service contract for any used car. You can and should.


A comprehensive service contract covers nearly everything in the customer’s car. It covers the interior and the exterior of the vehicle.

It doesn’t cover physical damage. That includes any wearables items (i.e., tires, brake pads, torn upholstery, wiper blades, and so on).

Here’s what it does cover:

  • Cooling system
  • Electrical (including battery packs in an EV)
  • Heat and AC
  • Steering
  • Suspension
  • Drive axle
  • Brakes
  • Transmission
  • Engine
  • Transfer casing 


A standard auto service contract will cover the same parts and vehicle systems covered by a comprehensive plan. The only difference is that it doesn’t protect the vehicle’s interior, exterior, or cooling system.


As the name indicates, the powertrain service contract will cover any part that delivers power to the car’s wheels. These components include the engine, transmission, transfer case, and drive axle.


For budget-conscious customers, dealerships can customize an auto service contract plan. These plans cover windshield repair, cosmetic deterioration, tire, and alloy wheel damage.

EV Service Contract Providers

EV service contract providers are the same as those of gas-powered vehicles. There are two types of providers:

  • Manufacturer Provided: Sometimes, the manufacturer’s financial institution will offer service contracts directly. For example, Toyota Financial will provide auto service contracts for their hybrid and fully electric models. 
  • Stand-Alone Provider: There are thousands of companies that offer vehicle service contracts. Dealerships often have relationships with a few they work with consistently. Reputable dealerships only partner with trusted service contract providers. 

5 Reasons to Offer Auto Service Contracts for Electric Vehicles

EVs are on the high-end of the automotive sales industry. Successful dealerships can effectively explain to these customers the advantages of purchasing an auto service contract. But can your salespeople explain the benefits of offering these protection plans?

It’s just as essential for a salesperson to understand why dealerships should offer them just as much as why customers should purchase them. So, make sure your sales staff knows why dealerships offer auto service contracts for EVs.

1. Increase Sales 

When your dealership offers an electric vehicle service contract to its customers, you add value while increasing profits. One part of boosting sales is to help the customer protect themselves from costly repairs. When they are happy with their purchase and feel that the dealership put their best interest first, they return to buy again. 

Another way they boost sales is by increasing the value of each vehicle sold. EVs are not cheap. Customers who purchase them are ready to spend money on a car. Getting the buyer to pay a little more to secure their investment is not difficult. 

2. Service Revenue 

Another reason to offer an EV auto service plan to customers is the added revenue for the service department. Nearly 37% of the gross profit at a dealership comes from selling F&I products and services to customers.

These profits extend to the service department, and service and parts account for 44% of the gross profits. These services cost more for electric vehicles, and EV service contracts cost more as a result. So, selling an auto protection plan to EV buyers adds that much more revenue to that department.

3. Customer Protection 

This was covered a little earlier in this article, but it’s worth repeating. Happy customers are repeat customers. People will return to the same dealership to buy a new EV. Not only that, but they will also bring their friends and family to that dealership to buy a new car. 

For example, one customer brought her adult child to the dealership she bought her car from years earlier. Her son had saved for a few years for a down payment on a Tesla. She wanted to make sure he got a good deal. She trusted that dealership so much that she also had her car serviced there. 

Less than a year after her son bought his car, she was so envious of the latest features in his newer model Tesla that she went back to buy a new car. Because that dealership had treated her well, she was a customer for life and now, so is her son.

4. Resale Value 

Resale value is another reason dealerships should offer premium auto service contracts. When a car has received its regular maintenance, it lowers the chance it will need costly repairs. The dealership also knows they’re reselling an EV that was well-cared for and a better value for the next owner.

5. Added Peace of Mind

Auto service contracts not only give the customers peace of mind to know they have protection from costly repair bills. Dealerships also benefit from the same peace of mind knowing their customers won’t get stranded and left with an extensive service bill.

As stated before, happy customers are return customers — who provide exceptional good word-of-mouth advertising for your dealership.

EV Service Contracts are Good for Your Customers and Your Dealership

An electric vehicle is an investment in the future. These vehicles are better for the environment and retain value. But they need the protection of an EV auto service contract. If you’re selling electric vehicles, you must be setting your customers up with one of these protection plans. 

At The Ace Group, we understand that safeguarding your customers from costly repair bills is only one reason to offer the service contracts. Our auto service contracts can help your dealership boost sales, customer retention, and revenue for your service department. Together, we can help you add value and achieve sales goals.  

Ready to learn more? Contact us today at The Ace Group to see how we can help you get the most from electric vehicle auto service contracts.