Fleets offer dealers the opportunity to increase service plan sales

By Sarah Tooze

Manufacturer service plans are often aimed at retail customers, but should they be? A poll carried out by our sister title Fleet News found that more than three-quarters (77%) of fleets would like to see all manufacturers offer pre-paid service plans.

Those manufacturers that don’t have an off-the-shelf service pack for fleets argue that the differing requirements of companies make it difficult to offer one.

The popularity of contract hire with maintenance agreements is cited as another reason.

But leasing companies can, and do, take up manufacturer service plans and, in theory, should pass the savings on to their customers. This means that even fleet operators that have maintenance agreements with their leasing provider should take an interest.

The financial benefit of service plans for fleet managers

Lex Autolease currently purchases service plans from two leading manufacturers, but integrates the plans with its own maintenance contracts as the schemes don’t cover wear and tear components, such as brakes and clutches, and can’t be tailored to different age terms and mileages.

“The benefit to fleet managers is financial,” said Guy Mason, head of fleet services at Lex Autolease.

“The service packs we currently purchase enable us to reduce our service, maintenance and repair (SMR) budgets as the manufacturer supports the cost of the packs in return for guaranteed service retention within their network.”

Lower lease rates are one of the benefits of opting for a manufacturer’s service plan.

Independent service plan provider Emac is also aware of the possibilities in the corporate sector.

“We are actively encouraging our dealers to ensure their fleet department, or sales personnel selling to fleets actively promote service plans. The Emac software has been designed to include fleet aftersales support and it is a golden opportunity for dealers to gain the same retention benefits for their fleet customers that are already available for private consumers,” said Emac chief executive Angela Barrow.

“Whether it is fleet managers for major fleets or business owners at SME businesses and whether it is for a car, LCV or even motorcycle, the opportunity is there today.”

BMW reports that almost all leasing companies and a large proportion of outright purchase fleets which acquire its cars also buy a service plan, which start at around £300 for a five-year/60,000-mile contract.

It says these can reduce SMR bills by 50% or more: a service pack for a 320d costs £360; BMW says the equivalent work outside a service pack would cost a fleet £724.51.