Today’s consumers are dazzled by all of the new technological advances in the automotive industry. With new alternative fuel capabilities, automated driving features and other advanced technologies available, it’s no surprise that consumers are itching to try out the latest and greatest “toys” on the market.
While new vehicle sales may be the focus of your dealership, the potential failure of new technology can be leveraged to provide a boost to your profits.
Innovation Doesn’t Come Cheap
New automotive technology is exciting, but it’s also expensive. Consumers expect to foot a higher bill when they purchase the vehicle, but they often overlook the potential costs to repair the new technology.
According to Wards Auto, “Electronic equipment accounts for more than 40% of a vehicle’s cost, up from 20% just 10 years ago.” With any new technology comes a greater likelihood that not all components will always work the way they should, and the repair costs can be significant.
As a dealership, take this opportunity to be transparent with your customers and educate them about the potential cost to repair high-tech components. Not only will this help build a trusting relationship, but it also opens the door for you to sell more vehicle service contracts (VSCs).
High Tech Add-Ons – High tech features, such as Blue Tooth, GPS navigation and drop-down DVD players are all incredibly convenient, that is, until they break. Sometimes the cost to repair these high-tech features can prove to be more than the convenience is worth. Other modern features that can really rack up high repair costs include back-up cameras and sensors, and automatic power doors.
Here’s a scenario that will really put these costs into perspective: According to Automotive News, the 2015 F-150 features a taillight that houses sensors for an optional blind-spot monitoring system. A regular taillight lens would cost $106 to replace. But, because of the high-tech features, the cost to replace the taillight jumps to a whopping $887.25—a 737% increase!
Onboard Computers – All modern vehicles come equipped with highly sophisticated onboard computers that play a critical role in the functioning of nearly every aspect of a vehicle. To diagnose a potential glitch with the computer, dealerships often need to spend a lot of time and resources to uncover the problem. To replace a single computer, it can cost up to $2,000. Unfortunately, post-warranty, those costs fall on the vehicle owner.
VSCs: An Affordable Solution for High-Tech Costs
Technological advancements may offer convenience, but in the event of damage, the repair costs can empty a customer’s wallet. And often, the service technicians at dealerships are much more familiar with new technology than at potentially antiquated “mom-and-pop” shops.
By offering a VSC at the time of vehicle sale, or post-sale, you can encourage customers to return to your service lane for fast, knowledgeable and high quality service. Budco Financial’s installment payment plans help to make VSCs more affordable for suitable customers by offering a variety of interest-free financing options.
In this new age of technology, selling service contracts through IPPs helps dealerships provide modern buyers with proper coverage for their tech-heavy vehicles. Customers will be buying peace of mind, and your dealership will be boosting profits and future sales potential.