Some people avoid running an automotive shop because of their limited understanding of what it can do. Usually, they think that it only repairs vehicles.

In reality, automotive shops can do so much more that benefits both the consumers and the business. Here are five excellent value-added services they can offer

1. In-house Financing

The cost of car ownership in the United States is getting more expensive each year. Within 12 months, it increased by almost 5 percent. It means that a car owner is spending around $9,200 a year or over $770 a month for their vehicle.

Many factors that contribute to the increase are out of the consumer’s hands. These include fuel, auto insurance, registration and licensing, and taxes. Instead, they can control how much they pay for the purchase, maintenance, and warranties.

Fortunately, some franchise automotive business opportunities already include a well-designed in-house financing option, which benefits the consumer and the owner.

First, buyers are more than likely to qualify for the auto loan here than when they apply to banks. The arrangement is especially beneficial for those with a thin credit history and a low credit score.

Second, the financing structure might provide a greater range of terms and rates than those available from local banks. This arrangement gives the consumer a sense of relief that their budget for a vehicle will not be stretched too thin or at risk of default.

As a result, the franchisee can offer more competitive loan rates with better terms for their customers. It draws in new buyers previously turned off by the high financing costs from traditional lending institutions. At the same time, the business retains current customers and builds a loyal customer base.

Third, financing arrangements might enable the franchisee to offer in-house warranties that can even surpass the coverage dealer service departments offer. When customers come in for regular maintenance, they can upgrade their warranties with affordable extended contracts that provide extra coverage.

2. Car Cleaning and Detailing

Only a few drivers realize that they are not traveling alone. Wherever they go, they bring with them millions of bacteria. Studies have even shown that the steering wheel hosts almost 630 colony-forming units of bacteria, making it dirtier than a toilet seat.

Besides microorganisms, vehicles are not immune to mud, dirt, and grime. Birds can poop, insects can crash into windshields, and sunlight can damage the paint. In other words, cars need extensive cleaning, so it will be safer to drive.

Automotive shops can help by offering car cleaning and detailing. During car cleaning, they can shampoo seats and wipe down the paint. They can also use a steam cleaner to get rid of mold and mildew in the air-conditioning system, heater vents, and flooring.

On the other hand, car detailing involves polishing, waxing, buffing, and scrubbing to bring out the best look for a vehicle’s exterior and interior.

Auto shops help their customers practice routine vehicle care by adding this service, which helps reduce maintenance and repair costs in the long run.

3. Dealerships

Automotive shops can also become dealerships. Dealerships are businesses where they sell new, used, and reconditioned vehicles. While the first two categories have more buying options for customers, dealerships also offer considerable benefits to automotive shop owners.

First, dealerships can be more profitable than service-based business models. They, on average, earn higher profits due to better economies of scale. They also benefit from customer referrals and a good reputation.

Second, dealerships offer greater variety than service-only businesses. With more cars to choose from, business owners can reasonably expect higher median revenue per vehicle than shops that only provide routine maintenance and repairs.

Third, dealerships can expand their market by selling vehicles to customers they might not have reached as a service shop.

4. Leasing and Loaning of Vehicles

Another business idea that automotive shops can try is vehicle leasing or lending. This service aims to accommodate clients who are unable to buy vehicles outright or those looking for replacement cars after their current ones have been totaled in an accident.

The concept itself is not new. However, it has seen a resurgence among smaller businesses since the Great Recession. This is because leasing companies are considered riskier bets compared to established financing institutions.

Leasing provides the convenience of not worrying about arranging for repairs, maintenance, insurance, or registration. At the same time, business owners can enjoy greater freedom in setting prices without worrying about hurting their relations with customers.

5. Fleets
mechanic holding a car battery

Auto shops can also generate more revenue by catering to a fleet of vehicles under the same brand or organization. For example, automotive dealerships that are subsidiaries of manufacturers offer fleet programs for customers who want multiple premium cars for their businesses. They might also lease out units to commercial transportation groups like taxi services and trucking companies.

Fleets can be beneficial for businesses because they generate more revenue than individual vehicles. They can distribute the cost of transactions such as billing, recordkeeping, and customer service to all vehicles under a single account.

On the other hand, fleet managers should consider purchasing vehicles from their shops instead of leasing them from outside dealerships. The shop can set stricter requirements for maintenance and repairs, as well as refurbishments, if necessary.

In summary, auto shops can generate more revenue by providing additional value-added services to their customers without compromising customer relationships.

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