Dealer service retention is in a rut, with independent competitors steadily snatching more of their customer base and billions in revenue, according to a new Cox Automotive report.
The details: A growing number of car owners have been steering toward regular repair shops, quick oil change locations, and mobile-based businesses instead of dealerships to service their vehicles—with cars that are five years old or newer driving much of the shift.
Dealerships—which made over $156 billion in 2024, with service and parts making up 13% of that revenue—now handle 12% fewer service visits than they did in 2018.
In 2025, only 54% of people with cars two years old or newer went back to the dealership where they purchased their vehicle for service, down from 72% in 2023.
What they’re saying: “These findings from our market data and surveys underscore the urgent need for dealerships to reassess their service strategies to recapture market share and enhance customer retention,” said Skyler Chadwick, director of product consulting at Cox Automotive.
Skyler Chadwick
Cox Automotive
Why it matters: As service retention erodes, dealerships lose a key profit center, a major driver of future vehicle sales, and a powerful pipeline for used-car inventory—putting both current earnings and long-term growth at risk.
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Between the lines: The massive shift among car owners to independent shops is being driven by a familiar pain point: transparency—which directly impacts new-vehicle sales and used inventory.
45% of customers are unhappy with dealership service because of surprise costs and poor communication, even though 2025 dealership repairs averaged $261 vs. $275 at general repair shops.
Car owners who get their vehicle serviced at the dealership are much more likely (74%) to buy their next car from the same place—exacerbating the cost of losing a customer to an independent shop.
Cox’s study also reveals that over half of car owners who need a big repair might trade in their vehicle—but only a few are told how much their car is worth when they bring it in for service.
“Dealerships are sitting on a goldmine, over half of customers facing major repairs would consider trading in, yet most are never approached with an appraisal, leaving millions in inventory acquisition costs on the table,” Chadwick added.
Bottom line: Meaningful gains in service retention come from clear pricing, consistent contact, and making every visit a two-way opportunity, not just a transaction.
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