Are service bookings slowing down?

[Gary Stephenson]

I am interested to find out if car dealerships' service departments are seeing a slowdown or reduced ATVs. I am based in Australia where mortgages are typically fixed for 1-3 years so the impact when they start going variable in the second half of 2023, I think will have a huge impact on car servicing, especially with old cars. In the US mortgages can be fixed for the term of the loan, so not the same issues but auto loan delinquencies and falling values could also be a major issue in the US market.

 

[Alex Snyder]

Hey Gary - we may have different terminology from Australia to the US. I think I know what you're asking, but to clarify, are you asking about:

a. service maintenance sales in the finance department
b. actual services being performed on cars in the service department

If it is b, the answer is yes. We have seen a slowdown in "Closed Repair Orders" since interest rate hikes and inflation became noticeable in daily lives. This will be short-lived as America's cars are the oldest they've ever been, and you can't push off broken unless you plan to leave it broken.

 

[Gary Stephenson]

Hi Alex, thanks for your response. Yes, I am referring to B. We are seeing some motorists extending the interval times between services and are expecting a reduction in ATVs. Also like the US, Australia has more older cars on the road than pre-pandemic with OEM car dealers selling high milage, non-brand cars over the Covid years and those buyers taking their cars to chain, franchise, and independent workshops for cheaper servicing. This article is interesting. Lessons from America?