Managing the Service Department Through High Oil Prices
10. 15. 26Author: Nate Chenenko
Publication: Dealer Marketing Magazine.
Date: October 9, 2026
The Iran war disrupted the oil market, and its effects are reaching dealer service departments. Full synthetic motor oil is on allocation from multiple original equipment manufacturers, meaning some dealers cannot get as much as they want. Bulk full synthetic motor oil prices have risen approximately 30 to 35 percent based on interviews with dealers and aftermarket shops conducted by Ducker Carlisle in summer 2026.
Competitive Dynamics
It is tempting to assume that a 30 percent cost increase affects dealers and the aftermarket equally. It does not, because the dealer channel’s margins are typically higher than the aftermarket’s. When input costs rise by the same percentage, the dollar gap between dealer and aftermarket customer prices widens.
In early 2026, an aftermarket customer paid approximately $41 for an oil change while a dealer customer paid approximately $47, a $6 gap. After a 30 percent input cost increase applied to both channels, the aftermarket customer pays approximately $53 while the dealer customer pays approximately $100. The gap widens from $6 to $8.20. Reconsider your margin on oil changes. Do not put service retention at risk because you did not adjust your margins a few points.
Programs You Offer
Many dealers offer prepaid oil change packages. If you are offering such a program and you, not the original equipment manufacturer, are on the hook for the costs, be extremely cautious. You may end up selling oil changes at a fixed price in 2026 that costs more than that price in the future. These programs also require you to have the oil available. If you turn away a customer who paid for five oil changes in advance and cannot use their coupon, you have a serious problem. You do not need to eliminate oil change packages, but be cautious when pricing them and consider shortening the term to limit your risk.
Your Customers
Ducker Carlisle founder David Carlisle describes a 10/80/10 customer distribution: 10 percent will always support you, 10 percent will always be difficult, and the 80 percent in the middle need a clear, coherent, factual response when they ask about price increases.
Any time you come close to a political topic like the Iran war, be careful. Here is how to deliver that factual response. Benchmark your prices against other oil change providers in the area monthly. If a customer asks about cost increases, tell them everyone has seen costs go up, that you track area prices, and that you are doing the best you can to keep costs down. Do not mention the cause of the increase. You do not want a political discussion at the service advisor’s desk. Communicate this approach to service advisors, technicians, and parts staff. Your goal is to share facts and avoid opinions.
The Bottom Line
High oil prices are tougher for dealer channels than for the aftermarket because of how margins work. Do not be surprised if the price gap increases. Work to keep it manageable. Do not sell programs that could hurt you in a year or two if prices remain high. And ensure your team communicates with facts, not opinions.
This article was first published in Dealer Marketing Magazine.