EMaC is urging car dealers to recognise the potential benefit of used-car service plans.

Service plans have a positive impact on lifetime value and retention, according to the company, with 49% of consumers saying their service experience has positively influenced their next car purchase decision, yet used car service plan penetration remains, at best, modest.

Immediate rewards and monthly sales objectives are often the priority, where service plans are a long-term strategy, it says. As a result, whilst there are some variations, less than 15% of used car buyers are offered one.

EMaC’s managing director Angela Barrow said: “Dealers will typically retain the service loyalty of customers up to the time of the first MOT. It is then that this loyalty starts to fall rapidly.

“A used car buyer with a service plan has a valued link to the dealer affording the opportunity to gain incremental aftersales work, which is more likely to include repairs as well as servicing, further enhanced by the potential for 49% retention. In truth, the opportunity is larger than in the new car market.”

“If offered a service plan, our research suggests many used car buyers would be interested. It is a product that is needed and which sits naturally at the point of the sales experience,” Barrow said.

Independent research by ICDP suggests that net lifetime benefit per car retailed and operated with a service package is improved, so that retained margin is increased by almost 50%; creating a win/win situation for the dealer.