As we settle into 2025, industry data presents a mixed picture for auto dealerships. While retail vehicle sales are following typical seasonal patterns with a notable uptick in new sales, several competing factors are creating market uncertainty.
According to vehicle services company Cox Automotive, supply levels are normalizing, but a slight dip in consumer sentiment somewhat offsets this positive trend. Rising auto loan rates since December and looming concerns about potential tariff implementation are adding further complexity to the landscape.
As such, service departments remain a crucial profit center for dealerships. However, maximizing service revenue requires a strategic approach that can be implemented quickly and show immediate results.
Credit card processing fees, typically 1.5 to 3.5 percent, can significantly impact your service department’s profitability. These costs add up quickly, particularly on higher-ticket repairs and maintenance services. However, implementing a zero-fee credit card processing program through a leading merchant services partner such as RevUpX can help recapture these costs and boost your bottom line.
Two primary approaches can help boost profitability by eliminating these fees:
A surcharge program adds a percentage fee to credit card transactions to cover processing costs. For example, if a customer pays for a brake service with a credit card, the surcharge would be added to their total, offsetting your processing expense.
Alternatively, a cash discount program sets prices at the credit card rate and offers a discount to customers who pay with cash. In this scenario, the posted price includes the processing fee, with customers paying cash receiving a discounted price.
The switch to zero-fee processing can typically be completed in weeks if not days, enabling your service department to start recapturing processing fees almost immediately.
Today’s service customers expect convenience at every touchpoint. Digital scheduling and modern payment solutions not only meet these expectations but can directly impact your revenue by streamlining operations and improving customer satisfaction.
Digital appointment scheduling transforms how your service department operates. By implementing online booking capabilities, you can maximize shop capacity and improve efficiency. The system helps fill traditionally slower time slots and reduces scheduling conflicts. More importantly, it enables your service advisors to focus on customer service rather than managing phone calls.
Beyond zero-fee credit card processing, modern payment technology offers additional revenue-generating features. Service financing options help customers proceed with higher-cost repairs by spreading payments over time.
Digital wallets and mobile payment capabilities provide the convenience consumers increasingly expect. When customers have flexible ways to pay, they’re more likely to approve recommended services and maintenance.
Service pick-up and delivery is no longer just a luxury offering. According to data from dealer service platform Xtime, 89% of customers find these services appealing. By implementing a strategic pick-up and delivery program, your service department can capture additional revenue while meeting growing customer expectations.
Indeed, this service does more than satisfy customer convenience一it helps optimize your shop’s capacity.
Pick-up and delivery enable you to fill traditionally slower time slots, particularly during mid-day hours when customers typically find it challenging to leave their workplace. This improved scheduling flexibility directly impacts your bottom line by maximizing technician productivity throughout the day.
The service can be structured as a premium add-on or built into specific service packages. Either approach creates opportunities to increase revenue per repair order while providing value customers increasingly demand.
Service departments stand at the intersection of rising costs and evolving customer expectations. Yet within this challenging landscape lie clear opportunities to enhance profitability through strategic operational improvements.
While current market indicators may send mixed signals, the path to increased service revenue remains clear: Focus on solutions that eliminate unnecessary costs, embrace modern customer expectations and create new value-added services.
The key is taking action. Each improvement you implement compounds the benefits of the others, creating a more efficient, customer-friendly service operation that maximizes revenue opportunities at every touchpoint.
Learn more about how a merchant services partner such as RevUpX can help you capture significant savings and boost profitability for your auto dealership.
Contact us today to explore customized solutions for your service department’s needs.