Service plans 250% rise
March 12th, 2010 by Richard Aucock
SERVICE plans were one of THE hit revenue streams for car dealers in 2009 with sales booming by 250 percent.
What’s more, says The Warranty Group, a similar rate of increase is expected for 2010, too.
Director Ian Simpson said service plans were fast gaining momentum. ‘Our view is that 2010 could be the year of the service plan.
‘Dealers that have paid little attention to service plans as a product in the past are starting to put measures in place to ensure that they are offering the right products and that staff have the skills needed to sell them.
‘The increase in sales that we saw in 2009 is an indication of the potential of service plans as a source of profit for dealers… we expect this realisation to continue to spread through the dealer community.’
Car dealers may already be aware of The Warranty Group’s service plan champion initiative. It is this that Simpson reckons is helping drive sales of service plans, by making them slide more easily into the buying process.
‘Where champions are in place, we are seeing penetration into used car buyers of up to 80 percent and, even where figures this high are not being achieved, the results are still very worthwhile for dealers.’
Are you seeing a boom in uptake of service plans at your dealership – and, if so, what is the effect on your profit margins?
Tags: aftersales, service plan, the warranty group