Study Finds National Repair Chains, Independent Shops Put Dealership Profits in Jeopardy

CHICAGO, April 17, 2014 /PRNewswire/ -- In a growing vehicle service market, auto dealerships are at risk of losing a substantial portion of their fixed operations revenue to national chains and local repair shops, according to an independent study commissioned by Cars.com. In the 2014 Service and Repair Report, leading market research firm GfK found that consumer perceptions about cost of repairs, lack of price transparency and underutilization of effective digital marketing strategies has called dealership profitability, specific to service, into question.

"With the average age of vehicles on the road increasing, and inevitably going off-warranty, dealers are being challenged to acquire and retain service customers," said Barbara Mousigian, vice president of product at Cars.com, a comprehensive digital marketing resource for dealerships and manufacturers. "Since consumers do not have a good sense of repair costs, they are suspicious of pricing and tend to look elsewhere for a trusted service provider. By promoting price transparency and highlighting dealership quality and convenience online, dealers have the opportunity to build trust with shoppers and ultimately win their business."

The study examined survey responses from more than 800 vehicle owners throughout the United States.

Key findings include:

• Price Perception: According to the report, over half of consumers believe dealership service departments are the most expensive service option, regardless of repair type. Consumers position independent repair shops as the least expensive option.
• Strength of Reputation: Online Consumer Reviews rank behind only Technician Certification Level and Price Guarantee/Warranty in importance to consumers when selecting a vehicle service provider. Dealerships have the potential to attract consumers by promoting their online reputations, specific to service, in addition to new and used car sales online.
• Initial Preferences: All things being equal, and when little is known about the repair facilities, 27 percent of consumers prefer to have their vehicle serviced at a dealership, while 43 percent of shoppers report no preference. National chains and independent shops are initially less-desired – 13 percent and 18 percent, respectively – though showcasing benefits through effective digital marketing tactics helps shift consumer preference.

"We know that consumers visit Cars.com for far more than just browsing dealer inventory," said Mousigian. "They are increasingly researching information about service and repair providers, and they're paying close attention to service reviews as a way to make an informed decision about vehicle maintenance. In an effort to provide our dealer customers with an opportunity to market to this growing number of shoppers, we are excited to roll out service features on the site this week."

The new service features on Cars.com will include a Service Tab on the Dealer Profile Page, top placement for dealers' service listings in the new Service Directory, and promotion of dealers when consumers use the service and repair Price Estimator Tool. For more information, visit www.dealers.cars.com.

ABOUT CARS.COM

Cars.com is an award-winning online destination for car shoppers that offers information from consumers and experts to help buyers formulate opinions on what to buy, where to buy and how much to pay for a car. Cars.com offers thousands of new and used vehicle listings, consumer reviews, side-by-side comparison tools, photo galleries, videos, unbiased editorial content and many other tools to take the drama out of car shopping. Cars.com puts millions of car buyers in control of their shopping process with the information they need to make confident buying decisions. Launched in June 1998, Cars.com is a division of Classified Ventures LLC.

SOURCE Cars.com