The Urgent Need for Prepaid Maintenance in Today’s Market
The automotive industry is currently grappling with skyrocketing repair costs due to advanced vehicle technology, rising labor expenses, and inflation. This challenging landscape creates a prime opportunity for car dealerships to leverage Prepaid Maintenance (PPM) plans like never before.
Why Car Dealerships Should Embrace PPM
With vehicle repair costs increasing by 20% and 42% of Canadians reconsidering vehicle ownership due to financial pressures, dealerships face a potential decline in sales. PPM plans offer a strategic solution by allowing consumers to lock in maintenance costs at today’s rates. This not only provides protection against future inflation but also ensures a steady revenue stream and increased customer loyalty for dealerships.
The Benefits of Prepaid Maintenance (PPM)
Increasing Vehicle Longevity and Complexity
Modern vehicles are more durable but require meticulous maintenance to perform optimally. PPM plans help manage these costs by covering routine maintenance upfront, thereby reducing the risk of unexpected and costly repairs. By locking in maintenance costs at current rates, PPM plans offer significant savings over time and shield consumers from future price hikes.
Maintenance Costs vs. Purchasing Power
Exhibit 1:
*This chart provides an illustrative comparison of the rising costs of car repairs over the past decade versus the savings achieved by locking in rates with Prepaid Maintenance (PPM) plans.
Advantages for Dealerships
- Steady Revenue Stream: PPM plans ensure a consistent revenue flow, enhancing financial stability despite economic fluctuations.
- Increased Customer Loyalty: Transparent maintenance costs and regular engagement through scheduled visits foster customer loyalty and retention.
- Remarketing Opportunities: Use PPM as a tool to re-engage customers who initially declined the offer, turning service visits into potential sales opportunities.
Advantages for Customers
- Budget Predictability: Locking in maintenance costs provides financial stability and predictability in an uncertain economy.
- Optimal Vehicle Condition: Regular maintenance under PPM keeps vehicles in peak performance, minimizing the risk of costly repairs.
- Enhanced Resale Value: Maintenance performed by certified dealers with authorized parts can significantly increase a vehicle’s resale value, maximizing the return on investment for PPM holders.
How to Effectively Sell Prepaid Maintenance
- Highlight Cost Savings: Showcase how PPM plans lock in current service rates, protecting customers from future price increases and illustrating potential savings tailored to their financial situations and vehicle needs.
- Promote Convenience and Peace of Mind: Explain how PPM simplifies budgeting by covering routine maintenance costs upfront, providing peace of mind.
- Demonstrate Long-Term Value: Emphasize how regular maintenance under PPM enhances vehicle performance and longevity.
- Customize and Build Trust: Tailor PPM pitches to individual customer needs, use data to highlight savings, and build trust through a commitment to service quality.
Maximize the Value of PPM
As repair costs continue to climb, PPM plans present a practical solution for both consumers and dealerships. They help customers manage maintenance expenses while providing dealerships with a reliable revenue stream and enhanced customer loyalty. By actively promoting PPM, dealerships can navigate rising costs and maintain profitability.
To find out more about how Prepaid Maintenance can benefit your dealership, contact us at Sales@lgm.ca.
