Originally Posted by
Cobra4B
At the dealership level, if I remember correctly, the money is made in sales... selling cars keeps the doors open. The service department gets the majority of their customers via warranty work. That right there pays for the overhead etc. etc.
Now maybe the customer-pay segment is just too small for the dealer to give a shit and they do just fine off of warranty work. But it'd be interesting to actually analyze the numbers. My huntch is that if you moved to a direct bill system vs. flat rate and were competitve on parts prices then you could grow the business.
Incorrect.
For all too long the service departments have kept dealers alive, generally speaking the profit from the service department is what carried the overhead for the dealership.
is the flat rate system antiquated? yes. It creates a breed of parts changing monkeys that would rather throw parts at something in hopes of fixing the actual problem than having someone with skill to diagnose it correctly and fix it right the first time.
The true diagnostician tech in a dealership is a dying breed, and they are generally padded flag time to make sure that cars get fixed while the other gravy flush queens are pumping out the revenue.
Selling ANYTHING at a wholesale or severely discounted rate is generally not a good fiscal idea for any business model.
The biggest problem most dealers have IMO is the fact that they listened to all these "consultants" that came in the 90's and told them they had to pad their bottom lines to make money.
This can turn into an interesting thread....