View From The Helm: Let’s talk loaner cars…
Bruce Howes
I often remind our team, that we are not so much in the car service business, as we are in the “transportation solution business.”
Folks rely on us to get their children to school safely, commute to their jobs, and head out for their vacations.
That means not just repairing their vehicles quickly and properly, but also helping them solve the transportation gap when their car is in for service.
We do that two ways, one is the Atlantic Motorcar Complimentary Loaner car program, and the other is our Valet service that picks up their car from their home or work.
Let’s talk loaner cars with this post. Most of us have them or want them.
Loaner Cars & Potato Chips
Loaner Cars are like potato chips, you can’t have just one! In fact, service loaner cars are a near necessity in today’s world. We’ve calculated that each loaner costs us on average about $200 per month, $100 for insurance, and $100 for maintenance.
We’ve also calculated that on average each ticket is easily between 15-20% higher with a loaner, with the average service order between $700 to $900, the ROI is solid and the program pays for itself, in fact, it actually makes money.
Why Higher ROI
Why a higher ticket on customers using loaners? With a loaner customer, you’ve removed the waiting time objection and just increased your odds 50% over a non-loaner customer, now folks can leave their car, go about their day, and you can take your time to properly inspect and service their car. Additional service work is far easier to present when the customer is not waiting, far easier for your advisors and techs.
Once the customer is out the door in a loaner the advisor can double-check and properly generate a profitable RO, source the parts for the best return, and assign the work to the best tech. The pressure is off, and all can work smarter, not rushed.
Make It Colorful – Decals/Vehicle Warps
The cost was just under $900 per car, more than just lettering as it was a wrap, but I look at it as I know have 10 rolling billboards on Maine roads every day.
Document It
To make it hassle-free for our customers, and to protect our investment, we developed a complete loaner car package, Sign Out and legal form, Loaner Damage Check-In/Out form, and Process Map on how to operate the system all done.
Publicize It
We did a contest on our AMC Facebook page, “Spot The Atlantic Motorcar Loaner,” the most creative photo won. Gave away an iPad Mini. Entries were posted pictures of our new loaner car fleet in scenic spots, people loved it!
Final Thoughts – Keep It Simple
We choose base 2018 Jettas. You don’t want to make it too fancy or your customers will want to give up their old cars.
I get a very nice VW Passat for VIPs and “make goods.” Admittedly, it’s not a base car, as it has leather and the technology package, but it’s a very nice way to reward a special customer
Summary
Not everyone gets or deserves a loaner car. Set up the game so you win. We generally limit their use to services lasting over an hour and only give them out with pre-approved service.
Use your loaners as a “showpiece” to sell your service and provide a convenience to your customer.
Bruce J. Howes is owner of Atlantic Motorcar Services, Wicasset, Maine. He also works in emergency medicine as a second career, and is a nationally registered Advanced Emergency Medical Technician (A-EMT). He serves as a board member at the Maine Maritime Museum, and various local nonprofit organizations. His shop’s website, www.atlanticmotorcar.com, has been selected by AutoInc. magazine as a Top 10 Website on three different occasions. He can be reached at bruce@atlanticmotorcar.com.
