Service plans were last year the main add-on to showroom finance to boost dealers’ F&I revenue.

That was important, says provider Emac, when absorption levels – aftersales’ ability to cover a dealership’s general overheads – fell as low as 55%.

Chief executive Angela Barrow  said that in 2012 retailers selling long-term service plans reaped particular benefit as new car sales picked up.

“Some retailers leveraged the marketing potential of service plans, but too many continue to miss out,” she said.

Emac has developed new marketing tools and support initiatives for retailers.
“In the year ahead, we expect absorption to lift a little,” said Barrow.

“The combined growth of new car sales in service plan sales will help.”

She said EU Block Exemption changes from June were likely to increase competitive pressures, but service plans for new and used cars could help counter this threat.