Loaners Cars for Customers

[Joe Marconi]

I have been considering adding a few loaner cars to my business. We do have a shuttle service for our customers, but there are many times that customers need the use of a car when their car is in for repairs or major services. We also have an discount agreement with the local Enterprise Rental Agency. I would like to hear from other shops, the pros and cons and opionions of loaner cars.

[FROGFINDER]

Transport to or set the customer with the rental car agent of choice. Let the customer pay for the car rental and you discount the amount you settle on off the repair invoice price.

[TheTrustedMechanic]

I have been considering adding a few loaner cars to my business. We do have a shuttle service for our customers, but there are many times that customers need the use of a car when their car is in for repairs or major services. We also have an discount agreement with the local Enterprise Rental Agency. I would like to hear from other shops, the pros and cons and opionions of loaner cars.

 

Joe,

One thing you need to do is talk with your insurance agent. I asked mine about it and he told me if I charged a "rental" fee my insurance would be astronomical, but that was not what I wanted to do, as I don't think that is what you want to do either. I am a one man shop as you may know and I have one company owned loaner and one personally owned truck that is my back-up loaner. I find it to be a great incentive. Granted most customers who enjoy the use of it are regulars, but it sure frees me up from being under the gun to get their car fixed if I fall behind. Right now the car is out so I can have the customer's car to try and catch an intermittent no start that has plagued the car for a few months now.

 

With you size operation and the fact that you can afford (I am not insinuating you have lots of money, just you have personnel to do it) to shuttle customers around, I had to stop everything and leave, you may not need loaner cars. Only you can judge the demand within your customer base. I find that the rental car idea puts off a lot of people because the last customer I had use a rental told me it went from $60.00 a day to a final cost of $100 a day with insurance and taxes. I believe the loaner car is a great idea. I have days in a row when the car sits in the lot unused and I have other days when the car is returned and loaned out again within an hour. And I got a $1200.00 job because I had it available, the customer could not be without a car because of work so either he would have done only part of the repairs or put them off completely if he had to be without a car or get a rental.

I firmly believe that my company's loaner car is a valuable marketing asset. And I am on the lookout for another.

 

With that said there are a few things to consider about what you pick for a loaner car:

• 
   
  
• Who will you let use it? Over 25 only, over 21, or 18? My insurance covers anyone over 18 with a valid driver license. This has come in handy a couple times.
  
• Where will you let it be used? Mine is only local, within 25 miles of the shop
  
• Who will pay for the gas? I find if the customer takes it to work and back or only a few hours they do not want to fill the gas and as long as the needle is on “F” they don’t, so by the third loan the tank needs an extra couple gallons and the last customer is upset because they had to pay for extra gas. You will have to accept the expense of fuel used to some extent.
  
• Be careful how nice a car you have. Of course you want a nice vehicle because it is a reflection of your business. Mine is a 2002 Mercury Sable GS. It’s very clean. I have had customers comment that they didn’t want to bring it back and pick up their car because they like mine better. Then I had one lady complain about numerous things, I think she’d complain if she was hung with a new rope.
  
• How are you going to police the condition of the vehicle? It was recommended to me, but I’m a one man shop so it doesn’t apply, to either drive the car home myself or have a service writer drive it home periodically to make sure everything is OK. Don’t rely on a short test drive or inspection to find everything. You certainly don’t want to let your car go out with a customer if it isn’t in primo shape.
   
  

 

That's all I can think of for now but I check back too. I can fax or email you my loaner agreement if you wish, it is in Excel 2007 format.

[xrac]

Joe,

One thing you need to do is talk with your insurance agent. I asked mine about it and he told me if I charged a "rental" fee my insurance would be astronomical, but that was not what I wanted to do, as I don't think that is what you want to do either. I am a one man shop as you may know and I have one company owned loaner and one personally owned truck that is my back-up loaner. I find it to be a great incentive. Granted most customers who enjoy the use of it are regulars, but it sure frees me up from being under the gun to get their car fixed if I fall behind. Right now the car is out so I can have the customer's car to try and catch an intermittent no start that has plagued the car for a few months now.

 

With you size operation and the fact that you can afford (I am not insinuating you have lots of money, just you have personnel to do it) to shuttle customers around, I had to stop everything and leave, you may not need loaner cars. Only you can judge the demand within your customer base. I find that the rental car idea puts off a lot of people because the last customer I had use a rental told me it went from $60.00 a day to a final cost of $100 a day with insurance and taxes. I believe the loaner car is a great idea. I have days in a row when the car sits in the lot unused and I have other days when the car is returned and loaned out again within an hour. And I got a $1200.00 job because I had it available, the customer could not be without a car because of work so either he would have done only part of the repairs or put them off completely if he had to be without a car or get a rental.

I firmly believe that my company's loaner car is a valuable marketing asset. And I am on the lookout for another.

 

With that said there are a few things to consider about what you pick for a loaner car:

• 
   
  
• Who will you let use it? Over 25 only, over 21, or 18? My insurance covers anyone over 18 with a valid driver license. This has come in handy a couple times.
  
• Where will you let it be used? Mine is only local, within 25 miles of the shop
  
• Who will pay for the gas? I find if the customer takes it to work and back or only a few hours they do not want to fill the gas and as long as the needle is on “F” they don’t, so by the third loan the tank needs an extra couple gallons and the last customer is upset because they had to pay for extra gas. You will have to accept the expense of fuel used to some extent.
  
• Be careful how nice a car you have. Of course you want a nice vehicle because it is a reflection of your business. Mine is a 2002 Mercury Sable GS. It’s very clean. I have had customers comment that they didn’t want to bring it back and pick up their car because they like mine better. Then I had one lady complain about numerous things, I think she’d complain if she was hung with a new rope.
  
• How are you going to police the condition of the vehicle? It was recommended to me, but I’m a one man shop so it doesn’t apply, to either drive the car home myself or have a service writer drive it home periodically to make sure everything is OK. Don’t rely on a short test drive or inspection to find everything. You certainly don’t want to let your car go out with a customer if it isn’t in primo shape.
   
  

 

That's all I can think of for now but I check back too. I can fax or email you my loaner agreement if you wish, it is in Excel 2007 format.

 

Have you considered something per mile to cover gasoline. Gas at $4.00 per gallon is a significant expense.

[Joe Marconi]

I want to thank everyone with thier input on loaner cars. I will take all advise and make a final decesion. ASO has great talent. Thanks!

[IntegrityAutoCare]

Just out of curiosity, what was your final decision on this issue and if you DID decide to offer loaner vehicles, how is it working for you?

[ajnealey]

Another good topic on loaner cars here. Anyone else care to share your experiences if you're using one?

 

Thanks!

AJ

[xrac]

We have two loaner cars which are loaned out. My insurance agent needed some work done badly and needed something to drive. He is driving one of my personal vehicles. Do you think I am covered? Ha!

[ATLAuto]

Transport to or set the customer with the rental car agent of choice. Let the customer pay for the car rental and you discount the amount you settle on off the repair invoice price.

 

This is really the best way to do it. We offer a shuttle service within 3mi of the shop. For 98% of all customers this is enough. The other 1% use Uber, a smartphone-based taxi service that is HUGE in urban areas. The other 1% use rental car, which they pay for themselves.

 

The only time that we provide a vehicle for the customer is when a repair goes south, and it is our fault. In those rare cases, we offer to pay their Uber fares all over for the night (typically only $20) or get them a rental car for the night.

 

I highly recommend downloading the Uber app and taking a look at it. You can get a customer a LONG ways for $5 on this thing ...

[ncsvoboda7]

 

This is really the best way to do it. We offer a shuttle service within 3mi of the shop. For 98% of all customers this is enough. The other 1% use Uber, a smartphone-based taxi service that is HUGE in urban areas. The other 1% use rental car, which they pay for themselves.

 

The only time that we provide a vehicle for the customer is when a repair goes south, and it is our fault. In those rare cases, we offer to pay their Uber fares all over for the night (typically only $20) or get them a rental car for the night.

 

I highly recommend downloading the Uber app and taking a look at it. You can get a customer a LONG ways for $5 on this thing ...

So I downloaded the app and just for kicks and giggles I put in a standard location that I could see needing a ride to. It was super seamless to use the app and get it set up but to my dismay it wanted to charge me almost $30 for one way. At that rate I could pay for the rental for one of my customers for a whole day without even a shop rate on the rental. Am I doing something wrong or where are these $5 fares??

[rickm0023]

We used to have a fleet of 4 loaner cars but it was very time consuming keeping car clean and in good working order. We felt our company would be better served to let the rental cars companies handle all that expense and up keep. We have a very reasonable rate with several rental agencies and the peace of mine to the owner of the repair shop, knowing the car is clean, newer, full of gas and in good working order is worth it.

[ncsvoboda7]

I think that is the direction we are leaning too. What advantages and disadvantages have you found with the different companies? For instance hertz I know will bring the vehicle and return the vehicle to your shop where enterprise will just pick the customer up.

 

Also would like some ideas of how to deal with the pricing. Its only about $30 a day for the rentals but would like to figure something out so we don't have to eat that cost. And something smoother than just charging the customer...

[carolinahigear]

I think that is the direction we are leaning too. What advantages and disadvantages have you found with the different companies? For instance hertz I know will bring the vehicle and return the vehicle to your shop where enterprise will just pick the customer up.

 

Also would like some ideas of how to deal with the pricing. Its only about $30 a day for the rentals but would like to figure something out so we don't have to eat that cost. And something smoother than just charging the customer...

 

When I was in the Diesel engine business, we shipped many blocks, cranks, rods, heads, engine kits, and engines by motor freight. I employed a salesman to call on my customers....trucking, construction, refuse companies, etc. Mike, my salesman, told me that the customer would blow a fuse if we charged freight or shipped collect. So we shipped everything "Pre-Paid," and just added the freight cost to some of the line items for the job. That way we got paid for the shipping and everyone was happy. Most of the time we do the same thing to cover car rental expenses. One day at $30 is pretty easy. Change the labor from 2.0 to 2.3 on just one R & R and that will cover it. Another tip....instead of just saying " I will get you a rental car" I say "I will provide a Complimentary car from Enterprise!" That way they know up front they don't have to pay for it. Psychology being what it is, even if they have a $1488 work order, they do not want to pay for a rental car, too. So we make it easy for them.

 

I had a lady in this morning for an oil service and rotation on her 2001 Accord. The CEL was on. When scanned it showed a P0420 Cat code. I gave her the price and she wanted it done today. When I told her I could do it next week, because I couldn't work it in today, I could see the anxiety on her face. She was wondering how to get it done since she has a fifty minute commute. I then told her That she could come in at 5:30 Monday and I would provide the "Complimentary Rental Car," and that I could do the Cat and O2 sensors Tuesday and she could pick up her car that day. She was really happy about that, and asked me if we could do the timing belt/water pump job that we suggested a few weeks ago. Could we work it in? So I told her we could do it all along with a transmission service and power steering service. She was so happy to get a positive response that she told me she loved me (Valentine's day, right?) and thanked me for taking care of her. Obviously it will be a good ticket and she is prolonging the life of the car.

 

It took me a while to learn how to set things up like this one, but the more you try it and do it, the better you get at it!! And the more tickets you will write and the more customers you will satisfy!!

[Mike Walter]

We recently have added a total of 5 loaner vehicles in the last 4 months and will be adding another one this week, for a total of 6. Being in a rural community where some customer live up to 15 miles from the shop, we are getting great results and a lot of happy customers.

All customers must be a min of 25 years old. I also have a contract the customer must sign and show they have insurance on the vehicle we are working on. I spent countless hours researching what the verb age of the contract says so it is a legal binding contract ( not bad for a guy who barely graduated from High School, I got my law degree out of a beer can, ). The contract is the key because the one I came up with releases the shop of ALL liability and also makes the customer liable for any damage.

We clean and check all fluids weekly and document everything on a spread sheet. We fix cars for a living, so maintenance really is not a problem.

I took a good sized hit on my shop insurance policy because while the underwriter liked the contract, they still have to cover the rear ends.

The added income ,not to mention very happy customers, offsets the insurance costs 3 fold.

Smoking in the loaner vehicles was an issue for a while but that stopped once we put a sign in each of them stating there would be $150 cleaning fee for smoking in the vehicle. We also added a smoking clause to the contract.

We have had some alcohol being consumed in the loaner vehicles ( maybe some guy looking for his law degree in a beer can ? ) The contract also covers this.

All vehicles are 10 years or older, so if one was to be totaled ( which the customer would have to pay ALL costs ) its not a big loss

for the business.

Studies show the number 1 reason a customer brings their vehicle to your particular shop is convenience, not price, and also not reputation ( which is still number 1 with our crew).

It was a risk at first and the program is still going thru its initial testing period, but it is really starting to pan out. Feel free to send me a message for more info, I would be glad to help. Just like this GREAT website has helped me.

Thanks, Mike.

[ncsvoboda7]

We recently have added a total of 5 loaner vehicles in the last 4 months and will be adding another one this week, for a total of 6. Being in a rural community where some customer live up to 15 miles from the shop, we are getting great results and a lot of happy customers.

All customers must be a min of 25 years old. I also have a contract the customer must sign and show they have insurance on the vehicle we are working on. I spent countless hours researching what the verb age of the contract says so it is a legal binding contract ( not bad for a guy who barely graduated from High School, I got my law degree out of a beer can, ). The contract is the key because the one I came up with releases the shop of ALL liability and also makes the customer liable for any damage.

We clean and check all fluids weekly and document everything on a spread sheet. We fix cars for a living, so maintenance really is not a problem.

I took a good sized hit on my shop insurance policy because while the underwriter liked the contract, they still have to cover the rear ends.

The added income ,not to mention very happy customers, offsets the insurance costs 3 fold.

Smoking in the loaner vehicles was an issue for a while but that stopped once we put a sign in each of them stating there would be $150 cleaning fee for smoking in the vehicle. We also added a smoking clause to the contract.

We have had some alcohol being consumed in the loaner vehicles ( maybe some guy looking for his law degree in a beer can ? ) The contract also covers this.

All vehicles are 10 years or older, so if one was to be totaled ( which the customer would have to pay ALL costs ) its not a big loss

for the business.

Studies show the number 1 reason a customer brings their vehicle to your particular shop is convenience, not price, and also not reputation ( which is still number 1 with our crew).

It was a risk at first and the program is still going thru its initial testing period, but it is really starting to pan out. Feel free to send me a message for more info, I would be glad to help. Just like this GREAT website has helped me.

Thanks, Mike.

If you were to add all your fees up, including the hike in your business insurance, gas, time it takes your employees to clean them, registration costs how much would you say it probably costs you, per day, to loan the vehicles out??

[ATLAuto]

So I downloaded the app and just for kicks and giggles I put in a standard location that I could see needing a ride to. It was super seamless to use the app and get it set up but to my dismay it wanted to charge me almost $30 for one way. At that rate I could pay for the rental for one of my customers for a whole day without even a shop rate on the rental. Am I doing something wrong or where are these $5 fares??

Ouch! We are in a dense urban downtown (100k people in a 3mi radius of our shop). Most customers only need to go 1-2mi from our shop, which is typically only $5-6 on uber.

 

In rural areas, uber costs a lot more, and customers travel further. Double whammy.

[Mike Walter]

Morning, the customer covers all fuel costs. I am coming in at around $5.50 per vehicle, per work day . We also use the vehicles for training purposes for lube techs to perform flushes, tire work, etc. which also brings an added value to the business.

[DUFRESNES]

After the pandemic, we don't give rides period.  We have 5 loaner cars with Liability insurance only on them at over $800.00 insurance for each one.  It has made all the difference in the world.  We don't give out a loaner for oil changes, only for any other work  We do give them to our Business Builders group even for oil changes. It comes to them full of gas and they need to fill up with gas at the service station a few blocks away.  If they don't fill it up with gas for the next person, we charge them $2.00 per mile. It makes a big difference in getting people to commit to bigger jobs. Its not always the money, it is time without their car.

 

[Joe Marconi]

3 hours ago, DUFRESNES said:

After the pandemic, we don't give rides period.  We have 5 loaner cars with Liability insurance only on them at over $800.00 insurance for each one.  It has made all the difference in the world.  We don't give out a loaner for oil changes, only for any other work  We do give them to our Business Builders group even for oil changes. It comes to them full of gas and they need to fill up with gas at the service station a few blocks away.  If they don't fill it up with gas for the next person, we charge them $2.00 per mile. It makes a big difference in getting people to commit to bigger jobs. Its not always the money, it is time without their car.

 

Are the any considerations for insurance and liability?