This is a new feature, showing examples, opinions and the advantages of selling vehicle service contracts (VSCs). And, the subject of performing repairs for VSC customers.
In today’s edition, we meet with Warren Smith, owner of Affordable Trsnsmissions. “We are a medium sized full service facility in East Haven, Connecticut. “We specialize in transmission repair and overhaul, but also perform a range of other repair services. We see warranties and service contracts playing a vital role for our growth strategy,” says Smith.
Q: How are servicie contracts helping you today ?
A: We complete about 20 to 30 complete transmission rebuilds per month, at an average cost of $3,500. About 10% of this business is covered by existing service contracts. In these cases, our customers truly recognize and appreciate the benefit of this protection, covering all or most of the cost of their major repair.
Q: Do you see a way to increase business using extended warranties as a tool towards that goal?
A: Yes, we loose some jobs because not every customer can pay for an unexpected major repair. So I believe that as vehicles get more advanced, and repair costs increase, that these services will enable customers to keep up with their repairs, while at the same time, increasing our shop production.
Q: Anything specific that can be done achieve these goals?
A: We do a lot of preventative maintenance, and routine repairs like brake replacement. Many of our customers do not have coverage, and pay for their repairs out of pocket. Many of these vehicles have 100,000 plus miles. We thought it would be helpful to offer extended warranties to our customers.
Q: How does this work ?
A: We educate the customer on their options for protection. We choose Alpha Warranty because the company has very fair pricing, especially for older vehicles with higher mileage. The customers are pleased with the additional security and peace of mind that comes with the warranty, and it’s potential future business for us. We can even finance the cost of the warranty, if the customer doesn’t have funds available for the full cost.
Q: So what’s the bottom line for you?
A: First, we make a small profit on the sale of the extended warranty, either sold with a used car, or sold as an “in service” contract for an existing car owner. Second, we see the opportunity to grow our repair business by 5 to 10 plus major repairs for month by getting more vehicle owners covered.