October 2015 ASE Question of the Month

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August 2015 ASE Question of the Month

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An overlooked profit center: service contracts

Eighty-five percent of motorists who acquire service contracts through a repair facility will typically return to the same shop for claim repairs,” says Rick Bale, managing director for Century Warranty Services, Inc.

That being the case, shouldn’t all shops offer service contracts to their customers?

“Absolutely,” says Bale. “Connecting the customers with high quality coverage is good for the shop and for the customer.”

Some shops have dabbled in selling service contracts but most shop owners have overlooked service contracts not realizing that they are a key tool for retaining customers. They give shops the opportunity to build long-term relationships with their customers who prefer to have their service work performed by the very businesses that helped them protect their vehicles from costly repairs.

Having this connection with customers also creates opportunities that make it easier for shops to recommend other necessary services such as regular maintenance during visits when repair claims are made. The opportunity to add parts and service revenue over the life of the contracts from both repair claims and customer pay maintenance is clearly present because the customers’ perspective is that they’ve bought one stop peace of mind from someone they trust for the protection and care of their vehicle.

“From the shop owner’s perspective, offering service contracts aligns with a shop’s core business of maintaining and repairing vehicles versus other prospective profit centers”, says Bale. “It’s wonderful if some shops can afford to start other retention businesses such as a car detailing operation, but the required investment in a new enterprise can be challenging or even crippling to them. Yet it doesn’t cost anything to offer service contracts.”

Protection against mechanical breakdowns are foremost on customers mind during a customer pay service visit. However, many customers are likely unaware that they are still eligible for coverage outside their factory warranty. This creates the perfect opportunity to raise the issue and offer valuable protection to shop customers. Who better to offer these contracts than the people they truly entrust to keep their vehicles running at peak efficiency?” Once they are informed that they are eligible, they are primed to learn about how they can protect their vehicles. “The key to selling service contracts is to assist customers by making the best coverage options available that specifically matches their vehicle, driving habits and needs”, Bale says. “Customers want professional consultation when considering a service contract, not a hard line sales approach. After all, that’s what they want from service advisers when discussing maintenance and repair options for their vehicles.”

“Typically, with service advisers concentrating on the daily tasks of writing up vehicle repairs, they are not prepared to offer advice or to sell service contracts”, says Bale. “Selling service contracts involves training service advisers or having a third party specialty firm standing by to handle it for them.” He adds, “Both options are possible depending on a shop’s particular needs.”

Because service contracts help achieve the ultimate goal of taking care of a vehicle, offering them should be viewed as a customer service that is easily incorporated into an adviser/customer exchange. For example, Bale says that, “a good time to bring up the subject is when a service adviser reviews the results of a multi-point inspection on the customer’s vehicle or when the customer is picking up their vehicle”.

Summing up, Bale says, “Offering service contracts is a practical and effective way to exceed the customer’s expectations, which also happens to be beneficial to shops.”

Article Categorization
News: Service Repair
News
Motor Age
Shop Owner
Customer Service | Service Repair
Shop Management | Operations - Service Repair
News | Service Repair
Article Details
<p style="font-size: 11.9999990463257px;">Eighty-five percent of motorists who acquire service contracts through a repair facility will typically return to the same shop for claim repairs so<span style="font-size: 12px;">&nbsp;offering service contracts to your customers is a great profit booster.</span></p>

Motor Age launches a no-risk, turnkey service contract plan

Motor Age has launched an exclusive extended service contract plan for independent automotive repair shops to offer to their customers. Designed to be a turnkey solution to help shops boost their profits, the plan is called the Motor Age Vehicle Protection Plan (MAVPP).

“The beauty of this plan is that everything to assist a customer with obtaining quality coverage— administration, marketing, sales and claims — is handled by coverage specialists for shop owners so that they can tend to their core businesses,” said Jim Savas, VP/GM of Motor Age and the UBM Advanstar Automotive Group. “Moreover, it is risk-free because it does not require financial or personnel investments. Connecting the customer with high quality coverage is good for customers and good for shops.”

This is made possible by Motor Age partnering with Century Warranty Services, Inc., one of the nation’s premiere service contract providers and Automotive Product Consultants , Inc. (APC), a leading industry marketer who powers the program. “These companies have achieved great success in the service contract business by being customer-focused,” Savas said. “It takes a company of Century’s caliber to handle claims professionally, promptly and fairly which, of course, reflects favorably on the shops offering the contracts.”

Rick Bale, managing director at CWS, said company officials are ecstatic to partner with Motor Age. “Century Warranty Services and its affiliates (CWS) have been providing premium contracts in the automotive arena since 1978 and are excited about doing the same in the independent repair sector by teaming up with its leading resource.”

According to Bale, MAVPP claims will be handled through CWS, which was established specifically to serve non-auto dealer channels. “An accurate and timely claims process will be supported by veteran team members, many of whom are ASE Certified and Master Tech claim adjusters,” Bale said. “To make sure that a shop’s customers get a plan that suits their needs, a variety of coverage levels are offered ranging from covering only catastrophic drive-train failures to covering virtually all mechanical and electronic components.”

“One of the features that makes MAVPP ideal for independent repair shops is the Portal Referral System (PRS) powered by APC,” said Savas. “PRS is an easy-to-use desktop tool installed on the shop’s computer to provide customers immediate information on available Century’s plans and then connect customers to coverage specialists to handle the details. 

“Shops can use PRS four different ways depending upon how involved they would like to be with the sales process.” Savas explained. “Shops have the option to simply provide their customers information, quotes, or start the sales process before turning the details over to coverage specialists thus saving shops from performing any processing task.”

For more information about the MAVPP, please contact Bob Olsen at 866/225-7135 or click here.

Article Categorization
News | Service Repair
Motor Age
Shop Owner
Shop Management | Operations - Service Repair
Technicians | Service Repair
News | Service Repair
Article Details
Motor Age Vehicle Protection Plan
<p><em style="font-size: 11.9999990463257px;">Motor Age</em><span style="font-size: 11.9999990463257px;">&nbsp;has launched an exclusive extended service contract plan for independent automotive repair shops to offer to their customers.</span></p>
<p>Motor Age Vehicle Protection, Warranty, warranty plan, Motor Age warranty, Motor Age Vehicle Protection warranty plan, extended warranty, service contracts</p>

July 2015 ASE Question of the Month

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Auto Care Association releases 2015 Digital Tool and Equipment Purchasing Trends

The newly released Auto Care Association 2015 Digital Tool and Equipment Purchasing Trends study reports that decision-makers routinely sought product technical specifications, warranty and price information on automotive-related websites, but ultimately purchased their tools from mobile vendors and full line parts jobbers.

The report provides insight into the overall factors influencing tool purchasing decisions, online tool and equipment purchasing experiences, type of tools and equipment planned for future purchases and percent of tools and equipment purchased online.  



This two-part report extensively explores the decision-makers’ utilization of the Internet as a tool and equipment purchasing medium. The first part of this report analyzes tools purchasing, with the second focusing on equipment purchasing all of which is based on the redesigned survey questionnaire created by the Auto Care Association’s Tool and Equipment Committee. 



Powered by Nxtbook Media LLC™, this digital publication features added value with functional enhancements. Users can:

•   Download Excel-based files, charts, tables and graphs that can be copied and pasted for presentations.

•   Turn pages with the click of a mouse.

•   View pages in a variety of sizes and formats.

•   Quickly locate what you are looking for through a “word search” feature.

•   Save material for future reference through the “bookmarks” feature.

•   Print the entire publication.

The new 2015Digital Tool and Equipment Purchasing Trends report is now available for $175 for Auto Care Association members and $350 for non-members. To order, visit www.autocare.org/market-intelligence, or call Auto Care Association market intelligence at 301-654-6664.


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Article Categorization
News: Distribution
Distribution News
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Auto Care Association
<p>The newly released Auto Care Association&nbsp;<em>2015 Digital Tool and Equipment Purchasing Trends</em>&nbsp;study reports that decision-makers routinely sought product technical specifications, warranty and price information on automotive-related websites, but ultimately purchased their tools from mobile vendors and full line parts jobbers.</p>
<p>aftermarket, auto parts manufacturers, auto parts distribution, Auto Care Association, digital tools, purchasing trends,&nbsp;</p>

Attempt to limit insurance lawsuits fails in Texas

Opponents have effectively killed a piece of Texas legislation that would have made it more difficult for property owners to sue insurance companies that unfairly denied or delayed claims.

The Calendars Committee in the Texas House of Representatives opted to not schedule Senate Bill 1628 for debate and vote.

The bill, which passed the Senate earlier this year, was drafted in response to what lead sponsor State Senator Larry Taylor said was "excessive litigation" after several years of severe hailstorms and hurricane damage in the Lone Star State. The bill would have made it more difficult for home and vehicle owners, as well as business owners, to sue insurers over damage claims disputes.

The bill was opposed by a diverse array of organizations, including the Texas Trial Lawyers Association, the Texas Mortgage Bankers Association, AARP Texas, and others. The Houston Auto Body Association (HABA) also opposed the bill.

"The bill’s author and supporters are selling a line that SB 1628 somehow helps consumers," said Alex Winslow, executive director of policyholder advocacy organization Texas Watch. "It does not. You don’t help policyholders by taking away their rights."

The bill passed the Senate on April 30 and was sent to the House Insurance committee on May 4.

The bill would have established a two-year time limit on seeking claims. Policyholders would have had to provide advance written notice, along with a signed statement attesting that damages occurred and show proof of damages before they could sue for deceptive acts or unfair claims handling. The bill also offered immunity protections to insurance agents and adjusters, and lowered the penalty insurance companies would have faced for making late payments. (The House version of the bill softened that last provision.)

Under current Texas law, when property owners file weather-related claims, insurers have to pay within 15 days or face penalties and interest on the payments.

The insurance industry backed the legislation, which they said would curb the increase in hailstorm-related litigation. Insurers have reported a 25 percent to 40 percent increase in post-storm claim litigation since 2008. In many cases, those suits were filed after the claims were paid.

In response to claims that the bill would strip consumer protections, Taylor issued a statement on April 29: “SB 1628 stops trial lawyers from filing frivolous lawsuits following a weather catastrophe and strengthens homeowners' rights. Policyholders deserve the lowest insurance premiums possible and to have their claims handled promptly and fairly."

Taylor also owns the Truman Taylor Insurance Agency in Friendswood, Texas.

Taylor and supporters of the bill attempted to resurrect some provisions in HB 3787, which allows a property insurance company to issue a policy that set a new statue of limitations for filing a lawsuit.

According to a statement from Texas Watch, the bill (which moved to the Senate Business & Commerce Committee at the end of May) would add notice provisions that "criminalize" mistakes on damage estimates, cut the time policyholders have to file claims to just one year, and create new processes for seeking approval for claims deadline extensions.

“This is a sneak attack on Texas families and businesses,” Winslow at Texas Watch said. “The Senate should see this for what it is: a naked attempt by a group of desperate lobbyists to ram through a giveaway for the insurance industry. Senators should reject this latest assault on hardworking Texans.”

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Article Categorization
Insurance Company News
Collision News | General
Article Details
<p>Opponents have effectively killed a piece of Texas legislation that would have made it more difficult for property owners to sue insurance companies that unfairly denied or delayed claims.</p>
Texas, legislation, property owners, insurance company, lawsuit, claim

Auto recalls are up, but many warranty repairs not completed

The number of vehicles recalled in the U.S. reached a record high last year, but even as important safety recalls get more attention in the U.S., drivers often fail to get their vehicles repaired. That means millions of people in the U.S. are driving, buying or selling potentially dangerous vehicles.

Research released earlier this year from Carfax indicates that more than 46 million cars nationwide have at least one safety recall that's never been fixed, and 5 million of those vehicles were bought and sold in 2014. That is an enormous increase over the 2013 figures, when Carfax estimate there were just 3 million cars on the road with an open safety recall.

One in three minivans and one in five SUVs has an unfixed recall, according to the report. California, Texas, Florida, New York and Pennsylvania have the highest number of unfixed recalls. States with the highest ratios of unfixed recalled cars include West Virginia, Michigan, Mississippi, Wyoming and New Jersey.

“America’s cavalier response to manufacturer safety recalls is putting lives at risk,” said Larry Gamache, communications director at Carfax. “Every morning millions of people drive to work, school and other places in a potential ticking time bomb. Fires, crashes and serious injury are just a few consequences of letting recalls go unfixed. The minor inconvenience that comes from having a recall fixed pales in comparison to what can happen if you don’t.”

The National Highway Traffic Safety Administration (NHTSA) requires automakers to quickly notify regulators and owners when a defect is uncovered. But that doesn't mean that owners actually get the repairs made. A 2011 audit by the General Accounting Office (GAO) found that less than 70 percent of vehicles under recall were actually repaired.

The problem is only getting worse as the pace and size of recalls increases. There were 64 million vehicles targeted by recalls in 2014, twice the previous record set in 2004. The recent Takata airbag recall has thrown this problem into sharp relief.

In that case, 17 million vehicles manufactured between 2002 and 2008 by 10 different automakers were affected. The airbags could potentially deploy explosively, injuring or killing drivers.

Earlier this year, U.S. Transportation Secretary Anthony Foxx announced Takata would receive a $14,000 per day fine for failing to fully cooperate with the NHTSA's investigation into the defective airbags. Late last year, NHTSA issued two Special Orders to Takata requiring the company to provide documentation and other material relating to the agency’s ongoing investigation.

A few days after announcing the fines, the DOT also issued an order requiring Takata to preserve all air bag inflators removed in the recall process to use as evidence for both NHTSA's investigation and private litigation cases.

Reaching out to drivers

OEMs are upping their efforts to improve recall response rates, particularly for the Takata airbags. Chrysler, Ford and Toyota have all reached out to drivers via direct mail and phone campaigns. Honda, meanwhile, has launched a massive advertising campaign to improve recall response. According to the company, as of March of this year only 1.1 million of the 8 million defective airbag systems in Hondas in the U.S. had been fixed.

The automaker is spending millions on ads in 120 newspapers and for radio spots in 110 markets. The company is also sponsoring custom Facebook posts that will appear in owners' timelines. Honda reported it was unable to locate nearly 18,000 vehicle owners affected by the recall.

The federal government is also considering how to deal with unaddressed safety repairs. In February, Secretary Foxx, National Highway Traffic Safety Administrator Mark Rosekind, elected officials, representatives from the rental car industry, and consumer safety advocates asked Congress to pass legislation that would require rental car agencies and used car dealers to fix safety defects before renting or selling vehicles subject to a recall.

The GROW AMERICA Act (a massive, six-year infrastructure and transportation spending bill) includes provisions that would require rental car agencies to remedy safety defects under recall, and require used car dealers to do the same before selling the vehicles. New cars have to be fixed before sale under current law.

“Every vehicle under an open safety recall should be repaired as soon as possible,” Foxx said in a prepared statement. “Requiring rental car agencies and used car dealers to fix defective vehicles before renting is a common-sense solution that would make our roads safer. Safety advocates and the rental car industry have taken a stand for safety, and we need Congress to do so as well.”

The Obama Administration also announced a proposed increase to NHTSA's budget in February, which would increase the agency's defect investigation budget to $31.3 million, approximately triple the current budget.

Other lawmakers hope to force states and consumers to take action. In March, U.S. Senators Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.) introduced legislation that would require state departments of motor vehicles and registration agencies to notify vehicle owners about open safety recalls. The Repairing Every Car to Avoid Lost Lives (RECALL) Act would also require owners to complete all safety recalls before renewing their registration.

“Unrepaired safety defects endanger everyone on America’s roadways. Important recall notices can get bogged down with legalese, and busy consumers can miss a lifesaving update,” Blumenthal said. “This legislation provides a common-sense avenue to ensure every driver is reminded and encouraged to make the necessary repairs and keep unsafe cars off the roads.”

Exceptions would be granted if the owner wasn't notified of the recall during the renewal process, if the manufacturing lacked the parts to complete the recall, or if the owner demonstrates that they had no reasonable opportunity to fulfill the recall. The DMV could then grant a temporary registration for up to 60 days.

The RECALL Act will likely face an uphill battle in the Senate, and if passed would pose significant logistics issues for state DMVs and drivers attempting to verify repairs.


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Article Categorization
Market Trend & Analysis
News: Distribution
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Article Details
<p>The number of vehicles recalled in the U.S. reached a record high last year, but even as important safety recalls get more attention in the U.S., drivers often fail to get their vehicles repaired. That means millions of people in the U.S. are driving, buying or selling potentially dangerous vehicles.</p>
<p>aftermarket, auto parts manufacturers, auto recalls, warranty repairs, National Highway Transportation Safety Administration, NHTSA, Carfax, Takata, U.S. Transportation Secretary Anthony Foxx</p>
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