Consumers Leaning More Toward Car Dealership Service Centers

A growing number of people who seek vehicle repair and maintenance work say they prefer auto dealership service departments over other repair facilities.

That’s according to the newly released 2021 Cox Automotive Service Industry Study. It indicates 34% of consumers prefer dealership service centers, a percentage point increase from 2018, and ahead of general repair shops. 

That is good news for dealers who over the years have faced challenges from independent shops and national car-care chains, which are geographically more prevalent than are car dealerships. 

Because of such competitors, Cox Automotive estimates dealers aren’t capturing about $214 billion in potential annual revenue.

Dealerships enjoy a reputation for doing quality service work – one reason for their popularity.

They also are cited as preferred because of their existing relationships with customers. The Cox Automotive survey indicates 55% of consumers say they go to a dealership because its service personnel know their vehicle better.

But dealerships continue to combat the perception that they are overpriced compared with the competition. The top barriers to returning to the dealership are not only cost, but also location.

Another negative: Nearly 25% of polled consumers say their dealership service visits take longer than expected.

Exacerbated by the COVID pandemic, service departments cite parts delays from manufacturers (58%) and finding or hiring the right technicians (45%) as their primary operational frustrations. Both issues can affect consumer experiences.

The survey says on average, dealerships cite a recent decline in the consumer satisfaction they deliver, with only 55% of dealers believing satisfaction has improved in the past 12 months (down from 71% when surveyed in 2018).

Dealers for years have struggled with hiring and retaining qualified service technicians.

That remains a problem, according to the survey. Fifty-seven percent of dealership respondents say their service department is not fully staffed. Eight in 10 expect these labor shortages to continue or even worsen in the future.

Yet, the majority (60%) say they plan to hire more service technicians this year, indicating an investment priority.

“The industry is ripe for transforming the consumer experience,” says Tracy Fred (pictured, below left), vice president of operations for Xtime, a Cox Automotive business unit that offers online dealership appointment scheduling and other service-related digital tools on dealer websites.

Tracy Fred (002)

Dealers who say they’ve improved the customer experience in the past year more often offer services such as service pick-up and delivery, ridesharing, work progress tracking, online cost estimates and mobile check-in.

The survey says car owners’ feedback is that they want the ability to schedule their appointment online. Nearly 75% of dealers offer that option today. Some polled consumers said they didn’t know that.

Consumers also want to online review and approve repair estimates (67%) and access their vehicle service history (66%) which, according to those surveyed, are among the most critical digital features a service center should readily and transparently offer.

Top-performing service departments possess a consumer-first mindset and use technology to enhance the experience by offering digital tools and convenience-focused services, Fred says.

She adds: “Consumers continue to stress the importance of a digital experience, and dealerships must evolve and offer flexibility by enhancing online capabilities.

“Meeting consumer demand for convenience by considering new service lines like ridesharing also can help combat location as a barrier.”

Steve Finlay is a retired WardsAuto senior editor. He can be reached at [email protected].