More than Profits: Bringing Customer Value into VSC Sales

While a vehicle service contract (VSC) sale can help to boost your dealership’s profits, the real value lies with the consumers. A VSC can be thought of as a form of “breakdown insurance,” alleviating the burden of paying out-of-pocket for many unexpected repairs. The average contract covers a fair amount of automotive repairs, so long as they’re not caused due to wear and tear or negligent maintenance.

Facing the Reality

Consumers understand that vehicle breakdowns occur, and that they can be costly to fix, but most don’t anticipate that it will ever happen to them. The reality is that vehicle repair costs can break the bank for one out of four auto owners. And you know that repair costs are on the rise. In 2013, car repair costs in the United States rose 6.7 percent; parts prices jumped 3 percent and average labor costs increased by 13 percent from 2012. Given all these factors, an extended service contract makes a lot of sense for most buyers. One way to help customers avoid costly future repairs is to make sure to offer a VSC to all your new vehicle buyers at the time of delivery and use an installment payment plan when the time is right.

Playing the Numbers Game

To help put the out-of-pocket repair costs in perspective, we’ve put together a quick reference cost-analysis guide. Click the image below to download and print, so that you have a tool to reference when educating your customers about the benefits of VSCs.


As the chart above demonstrates, a single unexpected repair can easily exceed the cost of extended service coverage. By not investing in a VSC1, consumers are taking quite a gamble.

Protecting Your Customers

Let’s say a customer is interested in a VSC, but isn’t able to roll it into their financing. Maybe they’re financing the vehicle on their own or paying in cash. The upfront cost of a VSC can understandably be overwhelming for these buyers, so what’s a dealership to do?

Fortunately there’s a fast, easy and flexible solution that can help to make VSCs more affordable for these customers. An installment payment plan allows customers to finance a VSC interest-free, over a time period that works best for them. Your dealership secures the VSC sale, and maybe more importantly, the customer is able to get the vehicle coverage they need.

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