Go Back

The Automotive Loyalty Gap

Why Traditional Programs Stall Post-Sale

The Point

Despite the value and visibility of automotive purchases, loyalty in the sector remains fundamentally underpowered. But not because customers aren’t loyal — in fact, they often are. With brand loyalty rates over 50% across major segments, automotive doesn’t lack loyalty, it lacks a system for turning that loyalty into sustained value.

Situation

Automotive brands enjoy enviable customer loyalty. Industry-wide repurchase rates sit above 50%, with leaders like Tesla exceeding 67.8% (S&P Global Mobility, 2024). J.D. Power reports loyalty rates as high as 65% among Ford truck owners, and LexisNexis Risk Solutions measured a 51.3% overall loyalty rate in new vehicle purchases. Many sectors would celebrate these numbers.

Yet brands continue to underleverage this loyalty between purchases. After the excitement of a new car fades and the warranty ends, many customers disappear from view. Service migrates to independents. Data remains siloed. Program benefits default to discounts or VIP events.

Meanwhile, EV adoption, mobility subscriptions, and lifestyle-based expectations are reshaping how customers define value. Traditional loyalty constructs like points and transactional tiers fail to reflect the full ownership journey.

What This Means

There is a widening gap between how automotive brands engage customers and how customers expect to be treated. Programs often:

Focus on vehicle repurchase instead of ownership experience
Underutilise customer data and behavioural triggers
Rely on events or discounts with limited scalability
Lack integration at the dealer and service level
Deliver too little habitual or emotional engagement

The issue isn’t retention — it’s value realisation. Loyalty must go beyond brand preference and become an engine for behavioural continuity and financial upside.

Some brands have tried. General Motors once ran a long-standing credit card program that let customers earn dollars toward their next vehicle — the economics worked because redemption triggered another sale. Hyundai in South Korea offered upfront car discounts funded by a co-issued Hyundai credit card — customers effectively financed their loyalty.

These models are rare — but powerful. They highlight what’s possible when loyalty mechanics are tied to the underlying economics of ownership.

Ellipsis Tips

Design for Emotional Loyalty: Move beyond offers. Recognise loyalty is earned through experience, recognition, and brand alignment. What does it feel like to be your customer?
Start Small, Scale Smart: Test practical mechanics — such as service-linked rewards or referral incentives — and invest behind what drives incremental value.
Empower the Frontline: Dealer staff must understand and believe in the program. Incentivise advocacy and train for consistent program delivery.
Modernise Your Loyalty Infrastructure: Break CRM and DMS silos. Build platforms capable of real-time, predictive engagement across service, sales, and mobility products.
Design for the Future of Mobility: Embed loyalty into EV usage, in-app services, mobility subscriptions, and sustainability-linked behaviours. Loyalty must travel with the customer.

Owning the car is no longer the whole relationship. Loyalty programs in the automotive sector must reflect the full lifecycle of value — from initial test drive to ongoing service, from app to asphalt.

The brands that win will be those that shift from transactional rewards to emotionally intelligent ecosystems. Loyalty is no longer optional; it’s a strategic lever for growth, differentiation, and resilience.

And perhaps, an opportunity to reinvent loyalty currency itself — what if your next vehicle starts with a points balance from your last?