Dealers Rate Independent Service

Dealers Rate Independent Service

Contract Providers Higher Than OEMs

In the profitable area of extended warranty programs, automotive dealerships are significantly more satisfied with independent service contract providers than OEM providers, according to the inaugural J.D. Power and Associates 2003 Dealer Service Contract Satisfaction Study(SM) (DSCS) released last week. The study measures dealer experience with the service, products and financial administration and fees of their primary service contract provider and is based on more than 5,000 responses from more than 3,300 auto dealers.

The study finds that independent providers score significantly higher than OEM providers in all measures of satisfaction, and do so with more competitive rates than traditional service contract products offered by manufacturers. Independent providers receive an overall satisfaction index score of 791 72 points higher than the overall OEM provider score.

Independent providers offer dealers more product choice and flexibility than OEM providers, and the representatives of independent providers are rated far superior to their OEM counterparts, said Scott Weitzman, senior director at J.D. Power and Associates. OEM providers must be aggressive in combating their more nimble independent competitors if they are to hold onto the large share of the market they currently control.

The study also finds that high-volume dealers are more satisfied with their service contract provider than low-volume dealers. This gap in satisfaction is particularly evident among dealers using OEM providers. CNA National ranks highest in dealer satisfaction with service contract providers, followed by First Extended Services Corporation and Toyota Extra Care, respectively.