Experian Automotive’s most recent market trends data for VIO, or Vehicles in Operation, tells the story of the total number of vehicles currently on the road by model year, segment, age, and market share.
The VIO “sweet spot,” comprised of vehicles typically 6-12 model years old that have aged out of general OEM manufacturer warranties, is growing, with 30.7% of vehicles falling in this category.
Why is this sweet spot so important? Over 4 million cars were added to the road in the last 12 months. Which gives the U.S. just over 270 million vehicles currently on the road. Typically models that are 5 years old and newer are still covered by the manufacturer’s warranty. So any vehicle that is a 2014 model or older will be more likely to have service paid for by the vehicle’s owner. A ‘sweet spot’ in those vehicle years is between 2008-2014. These vehicles, between 6 and 12 years old, are no longer eligible for manufacturer warranties but still have significant value. Vehicles that are 6 years old or older make up the majority of vehicles on the road.
Vehicles that are 12 years old or older have services that often outweigh the value of the vehicle, limiting their likelihood of getting services at all.
Your service department is in a great position to acquire new customers who fall under this sweet spot, a segment that independent service shops are already capitalizing on.
Bottom line? Your service and parts departments need to be ready for this growing opportunity.
Capitalizing on the sweet spot will improve your service department’s ROI. Being proactive and developing campaigns that address this sweet spot will benefit your service department because almost one-third of the vehicles on the road fall into that category. Understand your market so you can make more profitable decisions and acquire more long term customers.