Workshops urged to target older cars, as analysis shows invoice value jumps sharply after three years
Annual workshop value of a seven-year-old is £593, 61% more than for a three-year-old equivalent
Price jump attributed to increases in unscheduled work, repairs, wear-and-tear and MOT jobs
TekCor4 provides retailers with real-time predictions of likely work using vehicle history and maintenance prompts direct from OEMs
Retailers can unlock a significant boost in aftersales revenues by specifically targeting older vehicles, according to new analysis by TekCor4. The company found that – averaged across all powertrain types – the annual billable value of a seven-year-old car is £593, which is 61% more than the typical £369 per annum for an equivalent three-year-old model.
The company assessed workshop visits made within the past 12 months by over 2.4 million vehicles aged from one to seven years old. It found that, for vehicles with an internal combustion engine only (petrol or diesel) the average invoice value per annum is £372, which increases every year to reach £592 per annum at seven years. For battery electric vehicles (BEVs), the average three-year annual invoice value sits at £292 per annum, rising every year to peak at £647 during year six.
The TekCor4 analysis found that the year-on-year rises in annual invoice value can be attributed to the need for more frequent workshop visits as vehicles age, coupled with the rising average invoice value for each visit. As routine service costs do not increase markedly with age (and indeed fall with certain marques) the increases result largely from unscheduled work. By the time a vehicle is seven years old, six out of 10 visits do not involve a service at all.
TekCor4 is unique in being able to help workshops accurately predict work required for specific vehicles by combining OEM’s latest maintenance and repair schedules with millions of dealer workshop records. The company aggregates and evaluates information from these and other sources to identify the most profitable aftersales work for different vehicles at different ages and provides automated digital marketing tools so workshops can then prospect relevant owners at scale. This helps workshops to maximise utilisation, as well as focus on the most profitable work.
The process is guided by crucial maintenance prompts from the OEM that many retailers aren’t routinely keeping track of, such as gearbox, cambelt and brake fluid work, as well as safety recalls. It does this by drawing on vehicle maintenance schedules and alerts, combining them with the vehicle invoice datasets held within the user’s dealer management system (DMS).
Scheduled versus unscheduled work
TekCor4 has identified that, for a typical three-year-old vehicle, 49% of annual billable value comes from servicing, while the remaining 51% is from unscheduled work. This balance shifts significantly with age; by the time a vehicle is seven years old, the proportion of annual billable work attributable to unscheduled work rises to 70%, peaking at 75% for a 10-year-old vehicle.
The cost of this annual unscheduled work for a three-year-old is £174, and more than doubles to £412 at seven years old. This difference is even more exaggerated with battery electric vehicles, rising from £177 in year three to £501 at year seven.
Jeremy Evans, Director, Marketing Services for TekCor4 including Marketing Delivery, said: “Many car owners are keeping their vehicles for longer, which presents a significant opportunity for aftersales departments to both foster customer loyalty and increase their average customer lifetime value. Retailers can use AI-driven tools to predict upcoming aftersales work and then issue automated, hyper-targeted communications that drive retention and boost workshop profitability.”