Current Trends in Service Costs and Vehicle Age

Recent data indicates that dealership service customers are now paying an average of $521 for service work on their vehicles. This figure reflects the increasing costs associated with vehicle maintenance and repairs as cars age. Currently, the average age of vehicles serviced at dealerships is 12.6 years, which suggests that many customers are maintaining older vehicles that may require more frequent and costly repairs.

Warranty Coverage Analysis

An important aspect of service costs is the coverage provided by warranties. The data reveals that only 9% of service work is fully covered by warranty, meaning that the vast majority of service costs are borne by the customers themselves. Additionally, 16% of service work is partially covered by warranty, which still leaves a significant portion of expenses that customers must pay out-of-pocket.

Implications for Customers and Dealerships

The combination of high service costs and the aging of vehicles presents challenges for both customers and dealerships. For customers, the financial burden of maintaining older vehicles can be substantial, especially when warranty coverage is limited. Dealerships, on the other hand, may need to adapt their service offerings and customer engagement strategies to address these trends, potentially focusing on providing more comprehensive warranty options or maintenance packages to alleviate customer concerns.

For 2025, dealerships should add automated services to their customer outreach. Providing customers the option to trade or sell their car back to the dealership is a nice service for customers already doing business with that dealership. It helps promote loyalty! Sales departments average 14% of their monthly sales from repeat buyers, but best in class dealerships are breaking 35%. Some of these best in class dealerships are sourcing 22% of their used inventory from past customers.