Lapsed vehicle recalls costing dealerships £500m
About 20% of cars on the road have outstanding vehicle recalls, according to new research.
Data experts ADS analysed industry and dealer databases and found that about one in five customers were still driving vehicles after safety recalls had lapsed.
Apart from the obvious safety risks, it found that this is costing dealerships a combined £500m in potential revenues.
This is because customers who return their vehicles for a recall appointment often order extra services, with an average value of £309.
Vehicle recalls
Jon Sheard, operations director of ADS, said: “Dealers typically lose track of around 15% of their customers each year as people’s circumstances change. As well as missing revenue opportunities, this also leaves millions of cars on the road subject to an outstanding safety recall.”
ADS has developed a recall alert system to help dealerships cross-reference their databases with available recall data. In one initiative with a Mercedes dealership, it found that 20% of customers who had not been contacted for 18 months had outstanding safety recalls. By reconnecting with them, the dealership generated more than £450,000 in additional revenues over the course of a year.
Sheard concluded:
“In our work, we’ve seen franchise dealer databases where more than 20% of lapsed customers are driving cars with outstanding recalls. Based on real-life booking rates and customer spending habits, we estimate that dealerships are collectively missing out on up to half a billion pounds in additional revenue simply by losing track of customers.”
