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New Study Shows Car Dealerships Are Missing Service Business Opportunity

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author photo by Doug DeMuro April 2016

Car dealerships are letting service business slip away by not giving customers exactly what they want when it comes time to maintain and repair their vehicles -- so says the 2016 Maintenance and Repair Study from Cox Automotive, which examined automotive service habits of car owners.

The Numbers

According to the study, the automotive service industry is a $99 billion business, and yet only 30 percent of total service visits occur at the dealership. That's a lot of potential service business that finds its way to independent mechanics, major chain stores or DIY car owners.

The Reasons

One big reason why so many car owners avoid the dealer for service is the fear they'll be overcharged. More than half of survey respondents cited cost as a reason for not returning to a dealership for service, while over a third feel the dealer will overcharge for services. The result is that many car owners choose a different service provider that offers more bang for your buck.

The Cox Automotive study also found two other reasons why car owners avoid dealerships for service. One is awareness, as many drivers are unaware when they need to carry out services, maintenance and recalls. Another is customer experience, as the study found that customers introduced to the service department when they buy the car are far more likely to return for service. Car owners who don't make that connection, however, are more likely to go elsewhere.

What It All Means

Although it's unlikely that car dealerships will ever be able to capture all service business, the study clearly shows there's room for improvement -- important news for dealers interested in extra revenue.

The good news for consumers is that more and more new car dealerships realize that they’re really competing with other dealerships as well as independent shops and that has reduced prices in many service areas. While some vehicle owners might assume going to the dealer is too expensive, many offer perks like a free car wash or a an express oil change lane where a tire rotation and oil change cost about the same (usually less than $30) as at an aftermarket service center and can get your car in and out in less than an hour.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
New Study Shows Car Dealerships Are Missing Service Business Opportunity - Autotrader