Dealerships face service retention crisis as cars get older, loyalty drops

On the Dash:

• Dealerships are losing service visits and loyalty, with only 54% of new car owners returning for service in 2025.
• Service revenue remains vital, generating over $156 billion in 2024 and influencing future vehicle sales.
• Customers demand transparency, flexible options, and digital conveniences; addressing these can recapture market share.

U.S. dealerships are struggling to retain customer loyalty in their service department. The Cox Automotive Service Industry Study, which surveyed 1,974 vehicle owners, found that despite an overall rise in service visits, dealerships are handling 12% fewer visits than in 2018.

Only 54% of owners with cars two years old or newer returned to the dealership for service in 2025, down from 72% in 2023. Many vehicle owners are choosing competitors, such as independent repair shops, mobile service providers, and quick oil-change centers.

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While this drop in loyalty affects fixed operations’ profitability, it also has a broader impact on long-term dealership performance. Customers who use dealership service are 74% more likely to buy their next car there.

As the average price of new vehicles surpasses $50,000, consumers are holding onto their cars longer. In 2025, the average age of vehicles on U.S. roads increased to 12.8 years, increasing demand for service and repairs. Dealerships generated over $156 billion in service and parts revenue in 2024, accounting for roughly 13.2% of total dealership income, according to the NADA.

Despite these opportunities, almost half of vehicle owners (45%) expressed dissatisfaction with dealership service, primarily citing unexpected costs and poor communication. However, the average repair cost at dealerships in 2025 was $261, lower than the $275 average at independent repair shops.

Fixed operations revenue is critical for dealerships to offset shrinking profit margins on new and used car sales. Cox Automotive’s study underscores that customers value transparent pricing, easy scheduling, flexible options and digital conveniences. By improving communication, increasing transparency, and leveraging digital tools, dealerships can recapture lost market share and customer loyalty.