Why Gross Is Quietly Moving to the Service Drive (Again)
The Playbook: What the Smart Operators Are Doing Right Now
When people ask where the next wave of dealership profit will come from, they always look to the front end:
"New car margins are coming back," they say.
"EV sales will spike when incentives hit," they predict.
"Used car prices will recover after summer," they hope.
Maybe.
Maybe not.
But if you’ve been in this business long enough, you can feel it already:
The smart gross is moving back to the service drive.
Just like it always does when the market shifts.
I Saw It Happen Once Already
Back in 2008, when the world fell off a cliff, most rooftops scrambled:
Cut marketing. Cut inventory. Cut commissions. Pray for traffic.
Meanwhile, the stores that actually survived and some that thrived — had something the market couldn't take away:
A loyal customer base
A reliable fixed ops department
Service advisors who knew how to build relationships, not just repair orders
We started to see it:
The stores that treated every oil change like a mini-sale.
The ones that followed up on missed appointments faster than internet leads.
The ones that cross-trained service teams on customer communication.
They didn’t just survive.
They stole market share without spending a fortune.
Because when people hold onto cars longer, service becomes the brand relationship.
And when service is strong, sales get easier later.
It’s Happening Again — Right Now
You don't need a headline to tell you the economy feels fragile.
You can feel it every day on the floor:
Pencil deals are tighter.
Interest rates are crushing payments.
Used car margins are compressing faster than forecasted.
Even high-credit customers are hesitating longer.
Meanwhile?
Service tickets are growing.
Cars are getting older.
Warranty work is shifting.
Customer pay is climbing.
👉 The average age of vehicles on U.S. roads just hit 12.5 years — the highest in history.
👉 Warranty expiration rates are climbing by 7% year-over-year.
👉 Fixed ops gross profit is projected to outpace front-end profit in 2025 for the first time since 2011.
(Source: Cox Automotive, NADA 2025 Forecast Report)
If you’re still treating your service drive like an afterthought, you’re betting against math.
The Playbook: What the Smart Operators Are Doing Right Now
I’m not saying abandon your sales focus.
But if you’re serious about building lasting profitability, you have to go where the gross is growing and right now, it’s sitting in your service drive.
Here’s what the smartest stores are already doing:
1. Leading with Technician Videos — Every Repair, Every Time
Today’s customer doesn’t just want to be told they need new brakes they want to see it.
The best stores have technicians recording quick, personalized videos showing the actual wear, damage, or maintenance need.
It's not just transparency it’s a trust builder.
And customers who trust you approve repairs faster, decline less often, and come back when it's time to buy.
2. Treating Service Follow-Ups Like Internet Leads
Missed an appointment? Declined work? It’s not a lost cause — it’s an active opportunity.
Service BDCs and advisors who follow up with urgency, just like a sales team working fresh internet leads, are turning forgotten ROs into fresh revenue daily.
3. Building a Future Sales Pathway for Every Service Customer
No pressure. No pushy upsells. Just a simple, soft reminder that when the time comes — whether it’s lease-end, major repairs, or a life change — your dealership will be ready to help them transition smoothly into their next vehicle.
4. Timing Upsell Offers Based on Data — Not Gut Feel
Declined a $1,200 service today? Fine — but track it.
Set smart reminders based on mileage or use patterns. Reach out before it becomes a breakdown, not after.
Predictive service upselling is saving customers money — and saving stores from losing gross.
5. Training Service Advisors Like High-Level Salespeople
Why wouldn't we?
They’re handling your longest customer relationships.
Best-in-class stores are giving advisors the same skills in communication, value-building, and objection handling that they give their sales floors.
The result? Higher hours per RO, happier customers, and more trusted brand equity.
6. Tying Fixed Ops Directly to Store Growth Goals
Fixed ops isn't a silo anymore — it’s a frontline profit center.
Top operators align marketing, sales, and service toward one clear mission: retain and serve the customer across their full ownership journey, not just at point of sale.
Bottom Line:
The service drive isn’t where the action used to be — it’s where the future is right now.
A Story Worth Remembering
At one point, I worked with a store that sold half as many new cars as its competitors — but still beat them in total gross.
Why?
They had a service department that customers actually liked coming back to.
They didn’t chase every sales deal like a Hail Mary.
They built trust over 18, 24, 36 months.
And when the customer was ready for a new car, guess who they called first?
The person who cared enough to fix their car fast, fair, and with a smile.
Not the person who blasted them with Presidents’ Day emails.
Final Thought
You can chase gross in front-end deals all day.
You can wish for better incentives, lower rates, and bigger bonuses.
Or you can invest in what’s already in your building:
Your service drive
Your technicians
Your advisors
Your ability to keep the customers you already earned
Because when new gets soft, used gets tight, and buyers get cautious...
service keeps you in the game.
Always has.
Always will.
The question is whether you're building that muscle now — or hoping you can rebuild it later.
History says the winners already know the answer.
