Final day: Subscribe for $1.52/week.
JIM HENRY

Direct marketing of service plans is here to stay …

Jim Henry is a special correspondent for Automotive News
Earlier this year, it looked like direct marketers using high-pressure tactics to sell extended service contracts would take market share away from dealers. Then the best-known direct marketer, US Fidelis, went bankrupt, and several states cracked down on shady extended service contact companies.

But dealerships can't assume direct marketers aren't a competitive threat any more. There are legitimate companies -- and even some dealer brethren -- out there pitching extended service contracts.

And in an ongoing federal case in Illinois, the charges are aimed more at the sales tactics, and not so much whether the extended service contracts themselves were any good. The question of quality wasn't really tested.

Those factors make me think the direct-marketing concept is here to stay, even if it had a rough 2010.

25

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters