A new study suggests that car dealership service centers are losing business to general repair shops as repair costs and the frequency of repair visits are on the rise.
The study was recently published by Cox Automotive, and is based on survey responses from 2,493 vehicle owners, including 182 EV owners. Vehicle owners had at least one service performed in the last 12 months, with more than 5,500 service visits accounted for. Employees with decision-making authority over fixed operations at 525 franchised car dealers were also interviewed. The surveys were conducted during the second half of the 2023 calendar year.
According to the study, car dealership service centers accounted for 30 percent of service visits in the U.S., a substantial decrease from 35 percent recorded in 2021. General repair and service stations were second at 28 percent, while other locations, such as tire repair shops, body shops, and specialists, made up the remainder.
Thirty-three percent of survey responders indicated that “general repair shops” were their first choice for repairs and maintenance, an increase from 32 percent recorded in 2021. Additionally, 31 percent of owners indicated that “dealers” were their first choice, a decrease from 35 percent in 2021.
The survey indicated that trust was a key driver in this metric, with 54 percent of vehicle owners indicating that they would return to the car dealership where they purchased the vehicle for service because they trusted the dealer, down from 62 percent in 2021.
Dealers state that one of the reasons vehicle owners may not return to the dealer for service comes down to cost, or fear of being overcharged. However, the study indicates that the average cost for dealership service is only slightly ahead of the average cost of a non-dealer service, measured at $258 per visit for dealers, and $249 for non-dealers. However, the research also indicates that the average price per visit has increased 45 percent since 2021, although that amount also includes warranty costs.
Interestingly, the study indicated that EV owners visited service centers more often than ICE owners, with the average EV owner servicing their vehicle 2.6 times, as compared to 2.3 times for ICE owners. EV owners also required more services per visit and spent more time waiting for the repair work to be completed compared to ICE owners.