Vehicle Service Contracts
Reasons Car Dealers Should Sell Vehicle Service Contracts
Increased Profitability for Dealers Additional Revenue Stream: VSCs can be a profitable upsell for dealerships. Selling these contracts adds to the overall revenue, as they can often be bundled with the car sale.
Customer Retention and Loyalty Building Relationships: Selling VSCs helps establish a long-term relationship with customers. As customers continue to use the dealership for service, they’re more likely to return when they’re ready for their next vehicle purchase.
Helps Close the Sale Overcoming Customer Objections: Offering a VSC can help overcome concerns about the potential cost of future vehicle repairs and help customers feel more confident in their purchase.
Benefits to Customers When Dealerships Sell Vehicle Service Contracts
Protection Against Unexpected Repair Costs:
- Financial Peace of Mind: A VSC helps customers avoid the stress of paying for unexpected and potentially expensive repairs, offering a safety net when major components fail.
- Comprehensive Coverage: Many VSCs cover major systems such as the engine, transmission, and electrical systems, reducing the risk of financial hardship due to car breakdowns.
Better Budgeting for Car Maintenance:
- Fixed Costs for Repairs: A service contract often means customers won’t be hit with large, unpredictable repair bills. This can make vehicle maintenance more manageable within their budget.
- Additional Benefits (e.g., roadside assistance): Many service contracts include extras like towing or rental car coverage, which adds further value and helps customers feel more secure on the road.
Increased Vehicle Resale Value:
- Transferable Coverage: Some service contracts are transferable to the next owner, which can increase the resale value of the vehicle. This makes the car more attractive to potential buyers who want the peace of mind that comes with a service contract.
Convenience and Access to Authorized Repairs:
- Access to Dealership’s Trusted Network: Service contracts typically provide access to a dealership’s trusted service network, ensuring that customers receive high-quality repairs from certified technicians.
- Convenient Service Scheduling: Customers often find it easier to schedule repairs and maintenance with the dealership that sold them the vehicle and contract, streamlining the process.
