Overheard: Rise in EV warranty work in service departments should spur new strategies

"I saw some data recently … that showed repair costs on EVs were trending higher. I think you're going to see [customer pay] opportunities dropping with EVs but you're going to see warranty increasing. You would have this fundamental shift. Typically, you got 60, 65 percent of service department revenue coming from customer pay. And call it 30 percent, 35 percent comes from warranty. I think you're going to see a shift in those ratios. That means a couple of things. Most fundamentally, if there are fewer [customer pay] opportunities and there's more warranty opportunities, don't you have to rethink how you market your service department, how you capture that warranty work from customers? [It's] much more important now that you make sure you're getting all of those warranty-eligible vehicles in your [surrounding area] to come to the dealership. There's a fundamental rethinking that has to take place across all aspects of the service department — how you market, how you process your warranty claims, how your technicians are trained, how you manage the customer. I haven't heard a lot of conversation about rethinking all of that and it's just around the corner. We really need to be thinking about how we're going to manage that transition." — Jim Roche, CEO of warranty processing platform WarrCloud, on "The Golden Rule" podcast hosted by Jason Harris.