Make Your Dealer Prepaid Maintenance Program Work for You

Service departments are finally receiving credit for contributing to the growth and profit of dealerships and establishing a pre-paid maintenance program (PMP) is one of their best kept secrets to overall success.

It is well established that most PPM is being sold in the F & I department. But is that the only place they can be utilized for profiting the dealership? Pricing your pre-paid maintenance program plays a big part in whether a customer will consider purchasing a plan. One of the biggest challenges dealerships face when constructing their PMPs is that they tend to overcharge for their plans, arguing that they struggle to make a profit otherwise.

When buying a maintenance plan, customers are informed of their long-term savings and their    2-5 year worry free maintenance, depending on the length of the plan they purchase. However, from a dealer’s perspective, there is much more to consider than profits alone. If you are concerned about losing your shirt when selling PMPs, then consider developing your own PMP through a third-party provider such as UltraCare, and witness both your dealership’s profit and your customers’ satisfaction. By cutting out unnecessary costs associated with most PMPs, you can lower your prices and still come out on top.

What You Should Consider When Looking for A PPM

Prepaid maintenance programs, when presented effectively, increase customer loyalty, and create repeat business for both your service and sales departments. A customer is seven times more likely to return to your dealership if they have purchased a maintenance program from you, skyrocketing your dealership customer retention. In addition, customers are 83% more likely to purchase their next vehicle from you if they often visit your service department.

Try to keep the bigger picture in mind. Step out of the mindset of profit and migrate into one based on loyalty. You can start to see the forest and not solely the trees in front of you. Pre-Paid Maintenance Programs are a great tool for dealerships but can be unsuccessful and hurt the reputation you’ve worked hard to build with your customers.

In conclusion, it is not just about dealership profitability. It is about adding a loyal and trusting customer that will continue to return time and time again. Price your programs competitively and to the advantage of the customer, and in the long run, you will profit accordingly. Above all else, you will have a happy customer who will bring in more business through reputation and 5-star reviews.

Go Back