Mopar expands service contract coverage

Fiat Chrysler Automobiles is pushing to get customers to return more frequently to dealerships for service, and thus build loyalty to the dealerships with an eye toward future vehicle sales.

DETROIT -- Complete 360, Mopar’s most extensive service contract yet, is the latest salvo in an effort to use F&I products to produce more service business and thereby improve customer retention, say FCA US executives.

Complete 360 offers coverage for either 5 years/60,000 miles or 6 years/75,000 miles. Where many extended service contracts cover select components, this plan includes:

• Complete mechanical coverage for the entire vehicle.

• Complete vehicle scheduled and recommended maintenance, including parts and services.

• Complete coverage for all mechanical wear and tear, including, for example, brake pads and rotors, wipers, belts and hoses, headlamps, bulbs, fuses and wheel alignments.

“This is a true value proposition for our customers and one that we hope will keep them coming back to our network,” said Pietro Gorlier, FCA’s global head of parts and service.

Options

Alan D’Agostini, director of service contracts for FCA US, noted that the package also includes tire-and-wheel and appearance-care options. “Customers want to reduce the cost of ownership and want it to be hassle-free,” he told Automotive News. “Everything we do is trying to enhance the customer ownership experience.”

Complete 360, which is not transferrable to the vehicle’s next owner, comes with a recommended cost to consumers of $3,245 for the base 5-year/60,000-mile version. The individual portions of the coverage plan, if sold separately, would far exceed that, D’Agostini said, adding that F&I managers who offer a “good, better, best” menu would present Complete 360 as the “best” option.

Both he and Gorlier placed Complete 360 in the context of a push to get Fiat Chrysler Automobiles’ customers to return more frequently to dealerships for service, and thus build loyalty to the dealerships with an eye toward future vehicle sales.

Sales growth

In 2010, FCA’s U.S. dealers sold just over 800,000 extended service contracts, the company said. That grew to more than 1.9 million in 2015, in part because of higher vehicle sales and in part because of a more aggressive push by Mopar.

Every one of those Mopar Vehicle Protection contracts “generates on average at least three service visits,” Gorlier said.

Kelly Eighmey, Mopar’s head of technical assistance, offered one example. One of the most popular contracts is an oil-change program, a form of prepaid maintenance that falls within what Mopar refers to as its essential-care plans. That plan offers four oil changes over two years at a cost to the consumer of $70.

The typical utilization for that plan, Eighmey said, is 80 percent, meaning that on average, each plan sold results in three oil changes at dealerships. That implies an effective cost of $23 per oil change. But those numbers aren’t the important ones, Eighmey said.

“We’re not making money on these plans,” she said. “The strategy is to drive service retention.”

You can reach James B. Treece at jtreece@crain.com

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