Recall repairs stand out as an opportunity for auto dealers

According to data from CARFAX, the number of vehicles on the road with open recalls declined by 5% in 2020. However, more than 53 million vehicles continue to operate on American roads with a recall campaign that has not yet been completed. By their estimates, that accounts for approximately one in every five vehicles that can have potentially serious safety issues.

Case in point, a Jan 9 crash in North Carolina involving a 2002 Honda Accord has been determined to have caused a death due to the infamous Takata airbag inflator recall not yet performed – the 19^th fatality since 2009 for the recalled component. An estimated 11 million have not been repaired yet with many in American models.

Some of the highest open recall percentages are in California (26% incomplete), Texas (24%), and Florida (24%). Whether in these states or elsewhere, it serves dealers well to address incomplete recalls not only among the customers they’ve sold cars to, but for car owners in their service area.

Text2Drive, a platform to drive traffic to dealerships, reports that average revenue from recall repair orders totaled $282.20 per RO in early 2019. However, generating sales through the service department is only one component of the process that benefits dealerships.

Revenue without the fight

The “free money” idea certainly has its appeal for dealers, especially any that might have lingering slowdowns due to economic issues. Although recalls are charged at warranty rate – notoriously low compared to CP shop rates, in many cases – they represent a beneficial injection of revenue for service departments that may be struggling.

Emphasizing customers’ safety

Yet, even busy dealers should be making a concerted effort to lower the number of open recalls in their area. It might be policy for service advisors to check each VIN for incomplete campaigns, is it truly happening? When it does, customers can see the dealership’s concern for their wellbeing as they are advised of campaigns that need to be corrected.

For those who are seeking to bring in recall-only customers, it can begin to change their perspective from ‘stealership’ to caring dealership.

Potential for CP sales

Of course, service advisors and technicians can jump on the opportunity for upsells and advising about repairs that need to be completed. Uptake on upsells is typically at a much lower rate for recall campaigns, but the potential exists for the possibility of minor CP work on the same visit or during a subsequent appointment. It shouldn’t be the motivation for a recall push, though.

An opportunity for a sales handoff

Getting customers with aging vehicles back into the dealership also provides the potential for vehicle sales. Again, the focus should be on creating safer roads in your vicinity but a select few of those owners might find their way into the showroom for a test drive or walkaround. At minimum, it activates them in your CRM for future sales initiatives or product releases at a dealership they’ve begun to trust.

Manufacturers provide dealerships with the means to contact customers with open recalls. Many of the car owners may not see the importance of booking an appointment at the initial release and may have forgotten about the notice, changed contact information, or traded in their vehicles. For those that accept the offer to have their recall performed, the no-cost repair provides the service department with opportunities.

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