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December 31, 2010

News & Features

Giving it away: Free maintenance plans hope to win buyers and loyalty

New York Times News Service

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(iStock)

More automakers are offering free scheduled maintenance as an incentive for customers to choose their brand, and to encourage existing owners to remain loyal when they're ready for their next vehicle.

Typically, tasks like oil and filter changes, listed in the owner's manual as required for proper upkeep but not covered under the vehicle's warranty, are included. Some brands also cover items that are normally expected to wear over time, like brake pads and windshield wiper blades.

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An advertisement touts Cadillac's four years of no-charge maintenance services. (General Motors)

In April, as Jaguar was introducing its redesigned flagship sedan, the 2011 XJ, the company announced that it would provide complimentary scheduled maintenance for five years or 50,000 miles, starting with its 2011 models. In June, with the debut of its 2011 CTS Coupe, Cadillac said it would provide buyers of all 2011 Cadillacs free scheduled maintenance for four years or 50,000 miles.

Cadillac and Jaguar join other brands, including Audi, BMW, Land Rover, Lexus, Mini, Saab, Volkswagen and Volvo, in offering some level of no-charge maintenance services to their owners.

How much of a benefit these programs actually offer consumers depends on the brand of vehicle under consideration and the terms and duration of the coverage. Savings can vary widely; some cover only the first oil change, while others cover oil changes and other services for several years.

A good deal?
  • Whether free maintenance is a sweet deal depends on the details. And that's where consumers need to do their homework.
  • Karl Brauer, editor at large for Edmunds.com, recommends looking carefully at the specific coverage offered. "Service is a broad term," he says. "You could have much more covered in one program than another."
  • The programs generally include oil changes. Consumers get a better deal, however, if wear-and-tear items also are covered, as they are in programs offered by BMW, Jaguar, Mini and Volvo.

Edmunds.com has estimated the savings offered by the various programs, taking into account the cost of parts and labor. Edmunds's figures range from $95 for Land Rover owners to $2,738 for BMW owners. BMW estimates its savings to be $1,000 to $2,000.

Among luxury automakers, BMW stands out with coverage for four years or 50,000 miles, whichever comes first, including wear items like brake pads in addition to oil changes.

Why are all these announcements and incentives being offered now?

"Manufacturers are looking for the most cost-effective way to move iron off the lots," says Karl Brauer, senior analyst and editor at large for Edmunds.com.

Chris Sutton, senior director for retail operations at J.D. Power & Associates, says manufacturers were looking for ways to hold on to their previous customers.

"These no-charge maintenance programs are a very good way to get your existing customers used to using your service department," he says. "And then, in turn, they are going to be a little bit more likely to stay with the brand. BMW has definitely had success with that."

Also, it isn't unusual for these announcements to come in "me too" bunches, Brauer says.

"It's like dominos," he says. One brand does it and others need to match the offer in order to remain competitive.

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