auto

Do car dealer loyalty plans save cash?

Cars are becoming more complex, and repairing them can be difficult, Berkov says. By offering maintenance programs that are covered under warranty at no charge, manufacturers and dealers can help drivers reduce their overall car costs for the time they own the vehicle.

"Many people have a better comfort level by going to their service dealers, and loyalty programs encourage them to continue doing so," he says.

Some dealerships offer their own in-house loyalty programs. The Fitzgerald Automotive Family dealership group in Bethesda, Md., is one such example.

"We've created a loyalty program in-house, and that's where we put all our resources," says Rob Smith, a vice president with the group.

Smith says his company offers a combination of discounts and reminders to customers. Qualifying customers can get a few free oil changes per year, percentages off regular maintenance and discounts off new car purchases. Smith also sends regular maintenance notes to customers.

"As a dealer, we have a responsibility to stay in touch with our customers," he says. "They lead busy lives, so we try to help remind them when their car is due for service."

In many other cases, dealers don't manage the program details themselves. Instead, they pass clients' contact information to a third-party marketing company that oversees the loyalty program.

Air privacy concerns right away
Some people who sign up for dealer loyalty programs may have privacy concerns because dealers are collecting personal information such as e-mail and postal addresses.

Gorun agrees that privacy is an important issue. "The database of every one of our clients is stored by us," he says. "The dealer has access to it, but we maintain all the security and back-end protection."

Gorun says his organization does not store any personal information beyond the clients' postal and e-mail addresses. The full privacy policy is on the member Web site, he says.

"We don't share security information, and we don't store license numbers or credit card numbers," he says.

However, it's possible that some companies could share personal details with third parties, Ridout says.

"Can you be sure that dealers won't also be hawking this information to other businesses?" Ridout says. "Consumers who value their privacy should ask whether the information they disclose can be sold or shared to other companies."

MediaTrac is one of them. Mike Gorun, a managing partner at the San Ramon, Calif.-based company, says consumers benefit from these programs because every penny they spend on repairs counts in some way toward a larger benefit.

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"As customers build up points or credits within a dealership, they view the dealer relationship as more valuable," Gorun says.

Gorun notes that consumers get value from more than just coupons. Some of MediaTrac's most popular forms of communication are information-based automotive tips that dealers send to customers, he says. They are often sent in the form of an e-mail.

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