It’s time to stamp out overpriced car servicing

Franchised car dealers are under pressure like never before from independent repairers offering ultra-competitive deals on car servicing. We have already started to see large fleet and rental companies opt for using Kwik-Fit for their annual servicing on their cars, much to the frustration of dealers who feel that they should be getting that work. But there still remains the fact that there is very much a feeling that non-franchised servicing, especially within the first 3 years, is likely to severely hurt residual values.

After all, with the greatest respect to Kwik-Fit, if you are buying a 3 year old car for a great deal of money what would you rather see in the service schedule, the manufacturer’s logo and a guarantee of genuine parts or service stamps from some other repairer? They may very well have used the genuine parts but it doesn’t necessarily give confidence to the car buyer.

Most hardnosed used car buyers for the franchised dealers still turn their hard noses up at lovely low milers simply because the stamps in the service book aren’t right. As we have said before, for the private motorist it’s a simple choice at present; save money on your servicing costs and take a hit when you come to sell the car or have it serviced at the dealers and make more when you come to sell.

Either way it’s just an exercise in moving money around and if enough people are compelled to shun dealer servicing it becomes the norm and residual values normalize. By which time, of course, franchised dealers would have got their act together, hopefully.

Of course the bigger the car the bigger the bills (and the depriciation) so we can see why it might be tempting to cut the costs of servicing and in this time of austerity, with economizing the new buzz word, car dealers may be missing a big opportunity.

The main dealer sector has a real job on their hands convincing customers and businesses that their servicing costs can compete and shake off the perception (if that is the right word) that they are overpriced.

But maybe the fact that more car makers are offering 5 and 7 year warranties and dealers are sending their after sales staff on training courses designed to train them in selling service and maintenance plans, to work alongside these longer warranties, clearly means the fight back has begun.

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2 Responses to It’s time to stamp out overpriced car servicing

  1. Steve Boucher August 10, 2010 at 5:26 pm #

    I understand why people are tightening their belts and may look at cheaper options for servicing (or not bothering at all). Whilst there may be some affect on residual values, the customer is not really bothered until they come to part exchange their car. The biggest problem is the survival of the local dealer. We carry all the parts, special tools, send the staff on the training courses, provide the courtesy cars etc, and are expected to pick up the pieces when the likes of Kwik Fit are unable/uninterested in solving a problem. Non-franchised dealers do not have to make such a financial commitment and can therefore charge less for their servicing. If franchised dealers continue lose service revenue to the likes of Kwik Fit, they will go out of business – where will the customer go then for their warranty work? As the single site dealerships slowly disappear, will we see a situation where the big dealer groups are able to reduce the number of outlets and force people to travel further? Drawing a parallel with the local butcher, baker and greengrocer, they have all disappeared from the high street as people have decided to go for the cheaper option of the supermarket.

  2. david t baines August 10, 2010 at 9:54 pm #

    That’s a really good point, but surely the likes of KWF and Halfords will need to make the necessary investment and if not customers will come back to main dealers I think in the main drivers want their car looked after by the people they bought it new from the problem is they don’t want to pay £120 per hour and £200 for a tyre etc, it is all about finding a balance which enables the dealer to justify the investment but at the same time give people vfm, the trouble with servicing or other work is that it is not a pleasant way for people to spend their money and therefore it won’t take much to annoy them and send them into the clutches of the independents, main dealers need to work harder when they have the customer in the first place, after all if they buy the car from you the dealer then surely you are in the driving seat(pardon the pun) when it comes to retaining that customer, maybe complacency has set in and this is the wakeup call main dealer service depts. need. Let’s face it if everyone was happy with main dealers there would be no gap for kwik fit et al to fill.

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