Beyond the Truck Sale: Selling Other Dealership Services

Franchised truck dealers sold 482,274 medium- and heavy-duty trucks in 2024, with sales totaling more than $130 billion, according to data from American Truck Dealers. However, those sales accounted for just 20.8% of a dealership's total gross profit. New truck sales have also been historically cyclical, with peaks and valleys as economic conditions and environmental regulations create market fluctuations. That’s why dealership management should prioritize other products and services to stay profitable.

Focus on Parts and Service

ATD data shows that while Service, Parts and Body Shop departments represented 34.2% of total sales, they generated 73.8% of a dealership’s total gross profit. These departments help dealerships build long-term customer relationships and steady revenue, whether by providing maintenance and repair services or selling parts to fleets that handle their own repairs. A positive experience in Parts and Service can also lead to future truck purchases. There's a common saying in the industry: Service sells the second truck.

Service absorption — the ability of a dealership’s Parts and Service departments to cover operating expenses — serves as a common key performance indicator. The closer a dealer comes to full absorption, the less it must rely on truck sales to make a profit. Given the volatility of new truck sales, this adds critical financial stability. If your absorption rate is 75% or more, you’re doing a great job selling parts and service to customers.

To increase Parts and Service revenue, the Sales team should work closely with department managers to ensure new truck customers become aware of the dealership’s parts and service capabilities. Follow up with customers for maintenance reminders or upcoming parts specials. Make sure your Parts and Service teams work together to maximize sales. The Service department serves as one of the Parts department’s biggest customers, so ensuring a good working relationship proves essential.

One side note: Online parts purchasing continues to grow. If your website doesn't offer an e-commerce option, you could lose valuable parts sales.

Opportunities in F&I

Capturing F&I sales offers another way to boost dealership profitability. According to ATD data, F&I income accounted for just 0.5% of new truck sales, with a penetration rate of 11.8%. F&I products like extended warranties and service contracts can increase revenue per vehicle sold.

It’s best to have a variety of F&I products so your customers can choose what fits their needs. Consider offering GAP (Guaranteed Asset Protection) insurance, which protects truck owners if their truck is totaled or stolen and provides additional peace of mind.

Extended warranties — backed by the manufacturer, a component supplier or a third party — offer another attractive F&I offering. These warranties can cover specific components or provide more extensive protection and include the entire vehicle.

Pre-paid maintenance or service contracts can serve as insurance products, and customers can roll the coverage cost into monthly truck payments. These contracts keep customers returning to the dealership regularly, which can increase customer loyalty. They also create additional sales opportunities for customers who visit the dealership for service.

Putting It All Together

To maximize customer lifetime value, all departments in the dealership must act in harmony. Data silos — when other departments can't easily access customer information — can interfere with the staff's ability to service a customer properly. Dealers must eliminate them to break down these barriers. Ensure everyone interacting with a customer has access to their data and encourage departments to work together to build product and service packages to address as many of the customer’s needs as possible.

The trucking market is highly competitive, especially with so much similarity among products from different manufacturers. Selling all aspects of the dealership to a customer is a good way to set it apart from the competition and ensure a seamless experience for the customer.