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From: Jared Hamilton
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Alex Schoeneberger

Alex Schoeneberger Product Manager

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With Covered Maintenance Programs, Skeptics Abound

In a recent KBB.com Quick Poll, we asked consumers whether they trusted a vehicle with covered/free maintenance programs would be maintained as rigorously as it should be.  As you can see from the results below, a skeptical 56 percent thought that maintenance would only be done the least amount necessary, 30 percent trusted that the maintenance would be done as if it weren't free, and 14 percent had sadly never heard of covered maintenance programs.  

In this industry we know that customers are frequently skeptical of dealerships - a perception that is unfair in many cases because it reflects a few bad apples instead of the broad majority of dealerships.  We can also see from the poll results that there is still some room to build awareness of these programs among the 14 percent that don't know about them.

How Will You Use This Data?

If your dealership has a covered maintenance program, how will you go about educating these skeptical customers?  How will you enlighten the consumers in your market who don't know about covered maintenance?  

If your dealership doesn't have a covered maintenance program, will you leverage this skepticism to sell against your competition?  

What Questions Do You Want to Ask Consumers?

We frequently run Quick Polls on KBB.com.  Is there a question you want consumers to answer?  Ask it below in the comments and we will evaluate it for a future Quick Poll.

 

Eric Miltsch
Great stats Alex - understanding these perceptions can surely help. We're missing opportunities with the messages being shared for these departments. Trust & transparency should be a focus & a priority for these programs as well.
Stan Sher
I love this post. It makes me realize that a dealership that takes in lease returns and buys them out in order to sell them as a CPO vehicle need to invest more time into reconditioning and making sure the vehicle is in top shape. I also see that finance managers are missing the boat 14% of the time when selling certain products. This means they need to improve their presentation and offer the real benefits. This way they will 7% more. A business managers that delivers 100 cars per month will sell 7 more and increase gross, penetration, as well as provide value to the guest. From a consumer standpoint, I get a new vehicle every three years. This makes me more weary of buying a pre owned vehicle because I know that 56% of the time it probably was not serviced. But from a retail perspective I would use that 56% figure to make sure the my used inventory is properly reconditioned.
Alex Schoeneberger
Hey Stan - thanks. The data indicates that 56% of consumers think that maintenance performed under covered/free maintenance programs (similar to BMW's) will be performed the least amount necessary regardless of what the dealership actually does. The data is not indicative of whether or not actual vehicles are serviced on schedule over time or fully reconditioned for pre-owned sale. These Quick Polls ask consumers questions, so all we're getting out of this is consumer perception. To me, the way consumers answered this question means exactly what you said about finance managers needing to do a better job selling covered warranty programs. It also means, in my opinion, that both OEMs and dealers need to do a much better job evangelizing the value of covered warranty programs to consumers so that consumers understand the value of covered warranty programs when they're still researching their next purchase, making them more likely to choose a brand or dealer that offers one. We didn't ask consumers a similar question about CPO inventory, but I think that's a good idea and I'll add it to our queue of survey questions.
Stan Sher
Yes I would love to see those results too. Thanks.

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