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Study: UltraCare Prepaid Maintenance Plans Boost RO Upsell

March 5, 2013

SAN RAMON, Calif. — MediaTrac announced results of a 48-dealership study. This study examined how dealerships market and benefit from the sale of prepaid maintenance plans to their customers.

On average, dealers using the auto loyalty and retention program provider’s UltraCare PrePaid Maintenance services receive $102 in additional revenue per repair order. Dealers also enjoy strong plan renewal rates, the study found.

“Our retention rate is in the 50 percent range,” said Jim McAfee, parts and service director for Ancira Winton Chevrolet in San Antonio, Texas. “Our average customer up-sell on customers owning our prepaid maintenance plan is about $80 per repair order, which has generated $577,982 in additional parts and labor revenue over three years.”

Prepaid maintenance programs offer customers future oil changes, tire rotations, car washes and other services at a discount price. Most dealers sell the plans at their cost. Dealers sell these plans through F&I as well as the service drive.

Sames Ford in Corpus Christi, Texas just started selling the UltraCare plan. “Our first month we sold 22 plans through service and F&I sold 22 as well,” noted Yancy Rodriguez, service manager. “These plans keep customers coming back. They increase our opportunity to upsell additional needed services to them when they do.”

According to dealers in this study, three-year-term programs sell best in F&I. Purchasers buying these plans are less concerned about the plan’s cost, as the price is rolled into their finance or lease term. Those more price-sensitive service customers choose one-year plans.

Average plan retail prices for dealers in the study were:

One year:         $118.01

Two year:        $254.46

Three year:     $368.82

Three-year plans are most popular, at 64 percent of plans sold by dealers in the study — again, through F&I.

Some other notable study findings:

81.2 percent of the dealers in the survey sell the plans in service as well as F&I.

63 percent of all plans sold are in F&I.

37 percent of all plans are sold in the service lane.

Almost 95 percent of all plan holders purchase additional services beyond those included in the plan.

Plan holders visit their service department three times as much as do customers not owning such a plan.

The average service up-sell to plan holders is $102 per RO.

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