How One Automotive Repair Shop Revolutionized Regular Vehicle Maintenance with Subscription-Based Oil Changes

Owning a vehicle means that you will eventually need to change the oil. Regular oil changes are crucial to maintaining the full functionality of your car or truck. Most vehicles, as they age, should also be monitored for deterioration of various components, such as gaskets, hoses, and belts. Over time, even the mechanical systems in a vehicle may need to be repaired or replaced. An annual inspection to look for small issues can help prevent catastrophic failure, and potentially save hundreds to thousands of dollars in repairs. Maintenance of vehicle components that require cleaning, changing, or any other form of upkeep is critical to extending the life of your car or truck. Most vehicles should receive an annual tune-up to mitigate potential risks, such as poor air-to-fuel ratio when the air filter is dirty, or cleaning or replacing spark plugs as needed. All of these services can add up to be very costly on an annual basis, particularly in combination with high gas prices and auto insurance premiums. The owners of Mike’s Auto Repair wanted to provide these services at an accessible rate, rather than the standard, high up-front cost, and this notion was the basis for the development of an oil change subscription service.

Development of the Vehicle Maintenance Subscription

With accessible automotive maintenance in mind, the owners of Mike’s Auto Repair began the development of the subscription levels.

The result was three levels offered at three different price points. First, the Standard Oil level offers two oil changes, including the oil and oil filter, as well as a fluid check and top-off, as needed. In addition, two hanging air fresheners are offered with this package. Second, the Oil Deluxe service level provides the same features as the Standard level, but also includes two full diagnostic inspections. Finally, the Ultra Oil package includes all offerings from Oil Deluxe, plus two tune-ups and two clip or puck air fresheners.

Each of these service level packages displays the number of services allowed per 12-month period. So, each plan includes two oil changes per year, and the second and third levels offer two of each of the included, respective services during a 12-month span. Additionally, all service levels come with the “Next-in-Line” feature, which allows a subscription holder to arrive as a walk-in, without an appointment, and be seen next after any current vehicles in progress are complete. With a potential wait time of 3-4 weeks or longer when booking an appointment, this feature adds value to the lives of consumers via the ability to receive car maintenance services when they are needed without having to book an appointment.

Each subscription service level also offers a flexible pay date, should the purchaser choose not to keep the default due date. The default due date is the same as the date of the initial payment made when the subscription service plan is initiated. For example, if a customer purchased a new subscription service plan on July 7, 2021, and did not ask to change the due date, each payment would occur on the 7th of every month for 12 months. The final payment would be due on June 7, 2022, and would cover the final month of the subscription plan until it ended on July 7, 2022. However, should the customer choose to select a different due date than the date of the initial transaction, then the customer is required to pay the second month’s fee before the amount would have been due again. For example, if a customer purchased a subscription-based maintenance plan on July 7, 2021, but wanted the monthly payments to occur on the 20th, the customer would be required to make an initial payment on July 7, 2021, and a second payment on July 20, 2021. This would result in the twelfth and final payment becoming due on May 20, 2022, but benefits would still extend to July 7, 2022; the full 12-month duration of the subscription plan.

As with any subscription-based service, subscription automotive maintenance comes with terms and conditions. The subscription and all related services can only be applied to one vehicle. The purchaser of the service plan has the ability to assign the subscription service to a different vehicle than initially stated when the subscription was purchased, but once a single service from the selected plan is performed on a vehicle, the remaining services become non-transferable to any other vehicle, regardless of whether the purchaser wishes to apply the subscription services to one of their own vehicles. In the instance of households with more than one vehicle, discount options are available. The first two monthly subscriptions purchased by one customer are both full price, but any additional vehicles that they wish to cover with subscription-based maintenance receive a 50% discount. Additionally, there is the potential for early termination fees associated with the subscription service levels. Should the purchaser of a subscription decide, within 60 days, that they do not wish to receive future services via the subscription service plan, they can terminate their subscription and receive a full refund if no services have been performed. Should any service have been received within the first 60 days, the owners of Mike’s Auto Repair cannot issue a refund, but will cancel the remainder of the subscription by paying a $25 fee. Any time after 60 days, whether or not services have been performed, if the purchaser wishes to cancel their subscription plan, the purchaser is then required to pay either: a termination fee equivalent to six months of the applicable subscription fees or a termination fee equivalent to the number of months remaining out of 12, whichever is less.

Finally, Mike’s Auto Repair utilizes a standardized labor guide when completing automotive services and repairs. Labor guides are developed by highly skilled editors with extensive automotive experience. Using a methodology proven over time, “Estimated Labor Time” for a specific automotive service is calculated based on standard equipment and production options of the vehicle, along with the needs of an average, trained automotive technician. The result is a manual with highly accurate estimations of the amount of time needed for a specific service or repair on a specific vehicle type. Recording the steps and the estimated duration of a service provides a standardized description of each service. These descriptions and duration estimations are the basis for the subscription service offered by Mike’s Auto Repair. Therefore, oil changes consist only of the services and parts proffered by the labor guide, as do inspections and tune-ups.

Accessible Automotive Maintenance

While it may not be difficult for some consumers to consistently sustain regular automotive maintenance, the owners of Mike’s Auto Repair recognized that in their community, it is difficult for many. In its mountainous region, the repair shop is centered amongst a community of retirement-age citizens and low- to middle-income families. Many in the region’s populace are dependent upon a fixed income, whether received as a pension, social security benefits, or various forms of government assistance. It is the mission of Mike’s Auto Repair to provide quality automotive repairs and accessible maintenance to the community by maintaining the core values of trust, quality, value, and camaraderie.

This principle was the foundation of the development of the subscription automotive maintenance service, as the owners of Mike’s Auto believe that all drivers deserve a reliable, safe vehicle regardless of their circumstances. Even though purchasers of the subscription service agree to pay a small monthly fee year-round for automotive maintenance, the overall savings on any plan adds value to their lives by way of savings. The following tables depict the cost of the respective services included with each subscription level, along with the cost of the services without the subscription plan:

With social responsibility being of utmost importance, the owners are proud to offer this subscription service to their community and all regular visitors in an effort to maintain accessible automotive care for all.

Safer roadways and community

Providing accessible automotive maintenance for everyone has the inherent result of increasing the percentage of properly maintained vehicles within the community, and therefore is likely to reduce the number of motor vehicle incidents related to inadequate automotive maintenance. Motor oil that has not been changed upon reaching the end of its useful life has the potential to contribute to catastrophic engine failure. On any roadways, this poses a hazard to the driver and others around them. In the mountains of Northern California, the winding roads are often covered in snow and ice. A typical hazard, like engine seizure, while the vehicle is in operation, becomes a substantially more dangerous risk. Even in the warmer months, a car accident poses a much higher risk to the driver and those nearby than an incident on city streets: wildfires rage through this portion of the state each year. A forest fire could easily be ignited by a motor vehicle accident; this phenomenon occurs each year across the country. Drivers and non-drivers alike deserve safe roadways and a safe community, and Mike’s Auto Repair is honored to contribute to the safety of individuals, families, communities, and our national forests.

Passive Income

Providing accessible automotive maintenance in an effort to protect the community is great, but…what about the consequences of the subscription on the business? What is beneficial for the community is beneficial for all -- even if that looks different for Mike’s Auto Repair. Warm summer months bring tourists that visit to camp, boat, and enjoy the natural beauty of the mountains, rivers, lakes, and forests. This inherently boosts the economy of the immediate region, and provides locals with supplemental income, which can provide them with the opportunity for much-needed automotive repairs. This fact helps Mike’s Auto during warm, tourist months, but when all of the visitors have left for the season and the weather turns cold, even automotive repair shops can struggle with lost profits. Therefore, having a stable supply of revenue generated by subscription-holders is also beneficial for the shop itself.

While the revenue generated per oil change is less when compared service to service for standard customers vs subscription-holders, the overall annual revenue is higher than if the shop did not offer the subscription service. How? Without offering the subscription plan, predictions made by the in-house Administrative Manager and Business Analyst forecast annual revenue of approximately $6,600 for oil changes alone. However, the Business Analyst also concluded that by offering the subscription maintenance plan to customers, Mike’s Auto Repair could potentially see upwards of $50,000 in revenue generated from the subscription plans. How is the shop able to make such a drastic increase in profits by eliminating revenue when a service is performed? The answer is interrelated with the driving purpose behind the development of the subscription plan: most can afford the cost per month, and will sign up to maintain their vehicle(s). With a low monthly fee and zero due at service, far fewer individuals will opt out of receiving regular maintenance services on their vehicles. Mike’s Auto Repair views this as an opportunity rather than a risk, and will continue to faithfully serve its community and the individuals that reside within it.