Let’s look at how dealerships can find a new way to monetize lead-acid battery sales. All indications are that new vehicle inventories will remain below historic averages in 2022. These inventory restraints will keep consumers holding onto their vehicles longer than expected. The longer you own a vehicle the more likely your battery will fail and need to be replaced, which will lead to more battery sale for dealerships.

Electric starter motors became routine in the 1920s, requiring batteries to run. In 1971 a sealed battery that didn’t require filling was invented, and car dealerships became the designated car battery retailers. Today there are two major categories for vehicle batteries: lead-acid and lithium. Lead-acid batteries are primarily located in internal combustion engine (ICE) vehicles. Lithium batteries are located in Hybrid and electric vehicles (EV) units. In the U.S., lead-acid batteries make up more than 95% of all batteries currently on the road today, with lithium batteries growing market share daily.

Over the years, not much has changed with the lead-acid battery. But demands on the lead-acid battery have certainly increased. Every year manufacturers are adding new technologies that put strains on their lifespan. From stop/start technology to touchscreens, batteries are maxed to their limits. These pressures, along with weather and everyday wear, have consumers replacing lead-acid batteries on average once every four years. In extremely hot locations like Arizona and Florida, replacement can be as often as every three years.

The concept of a lifetime battery warranty is not new and has been in certain automotive dealerships’ service offerings for years. The lifetime warranty gained nationwide exposure when AutoNation partnered with Exide batteries and started selling a lifetime battery warranty in 2017. Southeast Toyota distributors followed suit with Interstate battery in 2019, rolling out the lifetime battery warranty on new customer-paid batteries.

“In running an organized profitable Parts and Service Department it requires a roadmap to continued success. With a lifetime battery warranty you can increase your gross profit on battery sales and also offer the customer a better warranty.” said Jerome George, Service Director at Village Cadillac Toyota in Homosassa, FL. In 2020, Mr. George’s department started offering a lifetime warranty in service. He reports, “A lifetime battery warranty has allowed us a new path for attracting new customers while also retaining our current customers”

To resolve that, let’s start with the same example given above. The service advisor offers the guest two options. The first option is a replacement battery with installation for $199. This battery comes with the battery’s standard warranty. The second option is the replacement and battery install at a price of $279. This battery comes with a lifetime warranty. The cost of the lifetime warranty is paid to the administrator to handle future claims and the difference is extra profit for the dealership’s service department.

Lifetime contracts are agnostic to the battery manufacturers. So regardless if your store currently sells AC Delco, Interstate or your OEM labeled batteries, a lifetime contract can be upsold on any battery make or size. Richard Bustello, GM of Brickell Honda, Brickell Mazda and Luxury Motors, started offering his clients a lifetime battery warranty at all three locations. “Due to the weather in Miami our customers are constantly replacing batteries. We find that this program helps fixed ops make a better margin on battery sales and now gives us the ability to monetize OEM replacement batteries in a new way. The fact that we didn’t have to change from our current branded batteries and could now offer a lifetime warranty made this program a no brainer.”

A key component of any service drive program is to make it easy for the advisor. Dealer Management Systems (DMS) integration is a must. You must trigger the op-code to auto populate the customer contract from the existing repair order. This allows for no extra manual entry for dealership personnel. “It has been a seamless process rolling out the lifetime battery warranty and our customers love it!” said George.

A lifetime battery warranty allows for customers to use the coverage at any battery retailer. “When our guests do travel,” said Bill Keegan, Service Director at Clearwater Cadillac / Jaguar / Land Rover in Clearwater, FL “The lifetime battery warranty travels with them and they are covered.”

“We have a large population of guests that are older and living on fixed incomes” said Mr. George. “As prices of everything keep rising, our guests like knowing that the next time their battery needs to be replaced there is only a $25 deductible, and the rest is covered. Regardless of the costs of a battery and installation years down the road.”

Scott Lear is president of Dealer Benefit, a full solutions product company geared to automotive dealerships. Dealer Benefit brings products to market through technology and innovation allowing dealership’s a new way to monetize. Scott started selling cars in 1993 while home from college at Auburn University and has been involved in the automotive industry ever since. He can be reached at slear@dealerbenefit.com