Showing posts with label service contract. Show all posts
Showing posts with label service contract. Show all posts

Monday, December 31, 2012

Service Contracts

With new cars lasting much longer the service contract business is on a decline. Dealers are finding more creative products to make up the loss. But, why can't service contracts regain there status as a serious revenue generator?

The product is being removed from the finance office and into BDC (business development centers) where several staff can focus on not only service contracts but several other profitable products as well.

Is there a need for service contracts since cars are built much better, car companies provide better warranties and cars perform better with fewer breakdowns? They are like insurance, you don't want it, hope you don't need it, but if you do, glad you had it.

On of the reasons for the slow down in service contact sales is costs. Depending upon the type car you drive and what you want covered the cost could be several thousands of dollars. Most lenders will include in the auto financing. The other is lack of presentation of the product to all customers and explaining the details of coverage. That's why the BDC will get better sales results.

Have you bought a service contract along with a new car purchase? Why did or didn't you?