The Future of Free Maintenance Programs

Since March of 2010, Toyota dealers have offered ToyotaCare®, a 2 year 25k mile complimentary maintenance program, on all new vehicles. In October 2010, Toyota decided to make the 2 years 25k miles maintenance program permanent. While some people have been critical of the value of this “free” maintenance – it can work out to as little as 2 free oil changes and 2 free tire rotations – there’s definitely something nice about free maintenance…even if Toyota isn’t offering much of it.

In the future, you can expect this program to become much more common AND increase in length – here’s why:

1. Dealers love them. Dealers need every opportunity to ‘capture’ new vehicle buyers and turn them into regular service customers. Many studies show that dealers are much more likely to obtain a lifetime customer if they can get them to come in for 3 consecutive oil changes. Since Toyota’s program is offering new owners anywhere from 5 free oil changes (one every 5k miles) to 2 free oil changes (one every 10k miles), that’s a huge step towards grabbing a new service customer.

2. Consumers expect them. According to the dealership service pros I talk to, consumers have come to expect maintenance-free vehicles now more than ever. Since many consumers don’t do their own maintenance – and don’t understand what it is or why it’s really important – they view maintenance as a real burden. Making it free reduces the perceived burden accordingly.

3. They improve brand loyalty. The trend in vehicle service over the last 30 years has been really troubling for auto manufacturers:

• Consumer buys new car
• Consumer decides not to service new car at dealership to save both time and money
• Accordingly, consumer has no relationship with the dealership that sold them their car
• Because consumer isn’t visiting dealership every 60-90 days, they’re not seeing the manufacturer’s new products
• When the consumer gets ready to buy another new vehicle, they’re less likely to return to the same dealer and buy the same product

By offering free maintenance, manufacturers increase the chance that dealers can ‘capture’ a customer and grow a repeat new-car customer.

4. They’re relatively cheap. Toyota and other manufacturers are reducing the frequency of oil changes by going with fully synthetic oil that only needs changed every 10k miles. The longer interval makes these free maintenance programs less expensive from the manufacturer’s perspective…we can expect to see the length of free maintenance match the length of the factory bumper-to-bumper warranty soon.

5. They facilitate leasing. Consumers often choose to lease a new vehicle because they’re significantly cheaper than buying (at least in the short run). Businesses often choose leasing because they need to write-off a vehicle expense as transparently as possible. Both businesses and consumers who lease like the idea of no additional costs beyond their payment.’

6. Toyota isn’t the first to offer them. Free maintenance programs have been around for a while, but Toyota was the first “non luxury” manufacturer to make them standard. Luxury car companies have been enjoying the benefits of these programs for years…Toyota is just following what already works at Lexus.

Chrysler-Fiat has recently moved to match Toyota’s free maintenance program by offering a 3 year 36k mile on two top-end Dodge models. Assuming Dodge buyers and Dodge dealers like the program as much as Toyota dealers, you can expect to see maintenance programs on all Chrysler-Fiat vehicles at some point…with the rest of the industry following.