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.
