Dude... $1000 to replace a water pump! A part I can get for $250 and swap in an hour... that's just nuts. And it's just one example.

 

My point is I'd be willing to bet that a dealer could increase overall revenue if they changed the perception that they are a rip-off. Most people I know only visit the dealer when the car is under warranty. After that they're looking for a qualilty indepenent shop.

 

Not everyone is you. JROW already said it. Some people seek the comfort and reassurance that a stealership provides. There are also those that have the loyalty to take their car back to the same dealer they bought the car from... or maybe multiple cars? Think senior citizen...

 

You do, as I said, most don't. Dealerships sell parts all day everyday at msrp. Sure some shop online, so do I. However, most don't. A lot of people don't care to do that and would rather buy in person so if they have a problem, they arn't shipping shit back to gm parts direct. It's simple really.

 

There is a system, flat rate manuals, independant shops use them too. They have smaller costs and bottom line so they have a lower labor rate. It's just like any other business. Go build yourself a 4 million dollar shop, hire 6-7 certified technicians, buy all the latest state of the art equipment, and then charge customers 1 hour, at an independant shops rate, to do a water pump when the manuals call for 5. See how long your business lasts.

As I said, I give good customers breaks, and I love helping people out when I can. At the end of the day tho, business is business, and it's set up to make money, not help customers save money. They wouldn't increase revenue by having the same costs, and charging less than they already do. If they would, I'm sure they'd have figured it out by now.

 

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.

 

Actually, service keeps the doors open. Sales isn't shit. Service makes most of the income, and keeps the customers coming back to buy cars. Service sells most cars to begin with because if they're not happy with the service they arn't buying from you again. Who do you think is making money for the dealership while sales are in the toilet? Customer pay is a huge part of income, and customers routinely come back for routine service and preventative maintenance, not jsut warranty work. Not everyone is looking to do their own work, knows cars, and takes the cheap way out like you are describing.

Seriously, you are way off, not being rude, but look into it.

 

Why in the fuck would the dealer lower his rates on parts and labor when what they're doing right now is making most of them plenty of money? There is no incentive. Even if they did lower prices to attract more business, it would take a lot of advertising for penny pinchers to even think about going to a dealer. I know that's the last place I will ever go.

 

I know service does sell some cars... lots of time a big service bill pending is what gets people car shopping. I had a customer once that thought if she bought a new car she could still get full trade-in and forget about the $4k in service it needed.

As for service keeping the doors open... well most of the forums I'm on have all the dealer techs bitching about having no work to do. But I know you see it first hand all day long.

 

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....