No one doubts the average age of vehicles on the road has gone up. The current average vehicle is 11 years old and trends in consumer purchases indicate this statistic isn’t going to change any time soon. In fact, indicators suggest average vehicle age might increase.
Automotive News recently reported that loan lengths for new and used vehicles in the United States hit record highs in the first quarter of 2015. New vehicle loans had an average term of 73 to 84 months. Typical manufacturer warranties are only around 36 months. So consumers who don’t purchase extensions could find themselves out-of-warranty with 48 months of loan payments still to go.
To aggravate the issue, GM announced in March that they’re going to decrease the warranty on Chevrolet and GMC vehicles and eliminate free service. And we all know the defection rate for service customers increases when their vehicle’s warranty ends. So what can you do to retain these essential customers?
Click below to read the full article: