The Indy Advantage
Consumers prefer doing business with independent repair shops over dealership service centers, according to a survey of 3,000 vehicle owners completed earlier this year. They’re choosing independent repairers by a 2:1 ratio—for two reasons shops can capitalize on.
“It is no secret that consumers are holding on to their vehicles longer for record lengths of time, meaning more visits to the repair shop or dealer service center,” says Brian Hafer, vice president of marketing for AutoMD.com, the organization that produced the survey. “[We] found that price and relationships are making consumers pull the independent trigger.”
Relationships Are Key
The largest reason why 67 percent of vehicle owners prefer independent shops over dealerships is trust and familiarity. Forty percent of survey participants reported a relationship with their local mechanic to be the leading factor that brings them to independent facilities.
“Customers want to have personal relationships so they can trust the people who offer advice as to what’s wrong with their vehicle and what needs to happen to fix it,” Hafer says.
And Hafer says independent repairers tend to operate with transparent strategies compared to dealerships, and have stronger relationships with their customer base due to more personalized interactions. In some cases, customers of independent shops even have opportunities to interact with the technical staff.
“Customers typically deal with service writers when they visit dealerships, not with the actual mechanic,” Hafer says. “There tends to be more connection between the customer and the person who actually fixes their car at independent shops.”
And Hafer says customers want to hear about their vehicle “directly from the horse’s mouth.”
Hafer says independent shops will continue to have a leg up on dealerships if they’re able to foster stronger relationships and company transparency with their customer base through personalized customer service.
The second advantage that independent shops have over dealerships is price. According to AutoMD.com’s survey, 78 percent of participants compared estimates between independent and dealership operations, and 87 percent reported independent quotes to be more affordable.
In fact, 80 percent of survey respondents reported overcharges for dealership repairs—59 percent claimed overcharges of at least $200, and nearly 20 percent claimed overcharges of more than $500.
In addition, more than 90 percent of vehicle owners believe they can save at least 10 percent by visiting an independent repairer over a dealership, while 66 percent believe they can save 20 percent.
“With so many cars falling outside warranty, consumers are going to compare repair quotes, and then go where they believe the price is right,” Hafer says, noting that 72 percent of vehicle owners say a 10 percent financial savings would make them opt for an independent shop over a dealership.
Cheaper Doesn’t Mean Worse
Lower prices can drive business to independent shops, but it can also create a concern that being the more affordable option means lower quality.
Hafer says that doesn’t have to be the case, and shops can combat that notion with customer education.
“It’s all in how you handle and explain this to customers,” Hafer says. “It’s on the repair shop to educate customers and lead them away from thinking they should work with an independent shop just because it’s cheaper.”
Take time to explain exactly why your prices might be less expensive compared to the dealership, Hafer says. There are plenty of business elements at play. Explain how dealerships have higher business overhead, marketing expenses, required use of OEM parts, and upselling requirements—a few factors that generate higher labor rates, part costs and unnecessary repair recommendations.
“Independent shops can focus on the fact that they’re still capable of offering quality work, quality parts and quality customer service—all at a more competitive price,” Hafer says.