There are countless ways your dealership could boost its profitability.
One of the easiest is to simply offer vehicle service contracts to your customers. In fact, until you cover this mandatory step, you’re almost certainly leaving money on the table.
3 Ways Vehicle Service Contracts Boost Profits
While they have become commonplace throughout the industry, many dealerships don’t give vehicle service contracts the credit they deserve. This means they either don’t offer them or don’t emphasize them to customers.
If you’re on the fence about them, here are three reasons they could quickly add to your profit margins.
1. Repairs Can Otherwise Be Costly
AAA recommends owners budget for $50 a month for their vehicles to cover ongoing maintenance or emergency repairs. That might not seem like a lot, but it certainly adds up over the years. If it’s a more expensive vehicle or a foreign automobile, that recommendation is probably woefully short of what it needs to be, too.
Customers who purchase service contracts with their new vehicles enjoy peace of mind knowing that they won’t have to set aside as much should the worst-case scenario happen.
2. Contracts Speak to Quality Construction
Some potential buyers are quick to point out that, if a vehicle is really worth purchasing, it shouldn’t need a service contract.
However, even the highest quality vehicles can experience unexpected problems, many of which may have more to do with the driver.
3. Service Contracts Make Used Vehicles More Attractive
The used car market continues to grow, which is great for dealerships that focus solely on this offering but also those that accept trade-ins they’ll then sell later.
That said, if you’d like help quickly moving used vehicles from your inventory, one of the smartest things you can do is offer service contracts for them.
Similar to the last point, this is a great way of showing a potential buyer that you stand behind the quality of the used vehicles you offer. To the first point, it will also reassure the kinds of buyers who often worry about unforeseen problems with used vehicles, despite their continued popularity.
Start Using Vehicle Service Contracts to Boost Profitability
If your dealership isn’t offering attractive vehicle service contracts to customers, you’re probably not earning as many customers as you could. For the three reasons we just covered, they’re an essential tool for boosting sales.
Contact us to learn how we can empower your F&I team with the kind that boosts profits immediately.