Sales of Fiat extended-service contracts are off to a slow start in the United States.
Laura Soave, head of the Fiat brand in North America, declined to say just what the numbers are. But she says dealers are finding it tough to sell extended-service contracts for a couple of reasons.
One is that the Fiat 500, the only Fiat currently sold in the United States, comes standard with no-charge scheduled maintenance for 3 years/36,000 miles plus a limited warranty for 4 years/50,000 miles.
The scheduled-maintenance offer is aimed at reassuring American customers who are skeptical about Fiat's quality. But that can make an extended-service contract less of a priority for some customers, Soave said during an interview in New York recently.
Also hurting service contract sales, Soave said, is a high number of cash deals.
The Fiat 500 debuted in March, after Fiat had been out of the U.S. market for 27 years. Early adopters have included a high percentage of cash buyers, she said. That's not unusual for a brand-new model, she said. "A lot of dealers are adding contracts when they get the opportunity, but the reality is there are not as many opportunities because there are a lot of cash deals," Soave said.
She said dealers are doing OK with extended-service contracts under the circumstances.
Fiat sold 3,141 500s in the United States through May.
Stephane Cloutier, head of product marketing for Fiat USA, declined to give sales penetration numbers for extended-service contracts when asked during a phone interview. "That's a feature we don't necessarily share; it wouldn't be fair" to dealers, he said.
The U.S. market averages around 40 percent sales penetration for extended-service contracts for new-vehicle loans, Power Information Network data show. For leases, penetration is around 10 percent, the data show.
Fiat USA offers Fiat-branded extended-service contracts that are backed by the Chrysler Group. "They're managed by Chrysler Service Contracts," Cloutier said. "The fact that they're managed by Chrysler proper gives the product more legitimacy with customers."