The Warranty Group says similar results from the two products are being reported by the franchise dealers, independent garages and car supermarkets with which it works.
Serkan Obuz, head of corporate sales and training, said: ‘PCPs have long been thought of as the leading tool for customer retention within the motor industry, but the results we are seeing from service plans are very much comparable.
‘In terms of building a relationship, both products are actually very similar in that they keep the customer returning in a structured manner over the lifetime of a contract.
‘Within that period, it is up to the dealer to perform well enough that the customer builds up a level of trust and eventually buys another car on PCP or another service plan.’
Serkan said that PCPs and service plans were sold as complementary products in many dealerships and increasingly in the used-car sector.
‘New cars are often sold with manufacturer service plans as part of their proposition but, as PCPs increasingly gain traction in the used market, we are also seeing increased penetration of service plans.
‘A customer who is financing a three-year-old car on a three-year PCP is a natural prospect for a service plan. Dealers who are able to offer a single monthly figure covering the financed amount and planned maintenance are finding this proposition has a high level of appeal to customers who prefer a “pay monthly” approach to motoring.’
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