63% OF CAR OWNERS WOULD OPT FOR INTEREST-FREE CREDIT TO PAY FOR SERVICE AND REPAIRS
A new survey from EMaC, a subsidiary of Innovation Group, reveals that 28% of car owners who don’t have a service plan in place finance car service and repairs using a credit card, adding to their monthly debt burden. Nearly two thirds (62%) said they would welcome and take advantage of an interest free credit option, if their dealer offered such a service.
Respondents to the EMaC survey said this kind of service would not only help them reduce the financial toll of unexpected maintenance costs on their car, but make them feel more positively towards their dealer, confirming how dealers can benefit from improved customer loyalty and retention levels as a result of enhancing their finance options.
Highlighting the importance of a good customer communications strategy, 38% of owners say they book their car in for a service when they receive a reminder via the manufacturer, dealer or garage. Just 1 in 5 (20%) service their car once the mileage has increased by between 10,000 to 12,000 miles, suggesting that when left to their own devices, routine servicing is often overlooked by owners.
The financial benefits of investing in a service plan however are widely recognised by car owners. 39% of those surveyed said the most important factor in purchasing a service plan was to help them better manage the cost. A further 1 in 3 (33%) see service plans as an important way to keep their car in good condition.
John O’Donnell, Managing Director for EMaC, comments, “Servicing and repairs costs can hit at the most inconvenient times, but many car owners don’t budget for these unexpected expenses. This can leave people with little choice but to pay on credit, often adding to already sizeable monthly interest charges. Whilst a significant amount of people said they prefer to pay in cash than incur more debt (43%), this sees them reduce their available disposable income in the short term, which could leave them struggling to pay for other necessities.
“The launch of “Drive Now Pay Later”, a flexible interest-free monthly instalment plan, comes as EMaC commits to delivering a wider suite of services to dealers and their customers. Our survey shows that the majority would welcome an interest-free solution to help them fund repairs and servicing, allowing dealers an opportunity to boost their customer offering to enhance loyalty and boost aftersales revenue throughout the ownership cycle.”