Dealer service dept. revenues increase if they had reasonable prices?
The Pro to call.
Joined: Jul 2003
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From: under cars.
Re: Dealer service dept. revenues increase if they had reasonable prices?
Run the numbers and see what the volume is you have to turn to make the same profit.
Would you rather sell 100 widgets at 50 bucks a piece or 500 of them at 10 bucks a piece to make the same profit? and that is not even a valid point cause your handling costs for dealing with 5x the volume is increased, so realistically you would have to do 600-700 widgets to make the same profit as selling 100 of them.
Internet wholesalers have to do hella massive volume to handle it, and the only reason sites such as the one you list can do it is because GM does not charge them for their shipments in, and their operating costs are covered by.....you guessed it......the Service Department.
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Fanboi
Joined: Jun 2003
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From: Virginia Beach
Re: Dealer service dept. revenues increase if they had reasonable prices?
Look at it from the banking standpoint:
Banks offer free checking accounts cause they KNOW some people are gonna overdraw, and they charge a hefty fee for that. The fees of the few pay for the needs of the many.
Comprehend?
Some dealer specific customers will buy a new car, have their service work done, and the ones that dont trade every few months will pay a premium for their service work because they like the transaction, technicians, or the staff. Whatever their reasoning is, they continue to come there, knowing that it is costing a little more but its a good value in their mind.
Then you have the people that bitch about every single price no matter how cheap, and dont care about service just the price. I personally cannot stand that type of customer, and have fired a few for just that practice. I tell them straight up that I do not cater to people that will complain for no reason and create a loss for my business. Generally, I can relate to their service line (what they do for a living, etc) and put it in terms they can relate to. In those instances, almost every single one has realized what they were doing and stopped, but the ones that still only care for the bottom line were sent packing. Most of them wind up being charged more in the long run due to shoddy work, incorrect diagnosis, and just generally having the asshole tax applied.
Banks offer free checking accounts cause they KNOW some people are gonna overdraw, and they charge a hefty fee for that. The fees of the few pay for the needs of the many.
Comprehend?
Some dealer specific customers will buy a new car, have their service work done, and the ones that dont trade every few months will pay a premium for their service work because they like the transaction, technicians, or the staff. Whatever their reasoning is, they continue to come there, knowing that it is costing a little more but its a good value in their mind.
Then you have the people that bitch about every single price no matter how cheap, and dont care about service just the price. I personally cannot stand that type of customer, and have fired a few for just that practice. I tell them straight up that I do not cater to people that will complain for no reason and create a loss for my business. Generally, I can relate to their service line (what they do for a living, etc) and put it in terms they can relate to. In those instances, almost every single one has realized what they were doing and stopped, but the ones that still only care for the bottom line were sent packing. Most of them wind up being charged more in the long run due to shoddy work, incorrect diagnosis, and just generally having the asshole tax applied.
Another good example is with the EBCM in Corvettes. The EBCM (electronic brake control module) is prone to failure as C5s get older... I forget the dealer cost for a new part but it's near $2000. There's a guy online who goes by "absfixer" and he charges $150 or so to fix yoru module if you send to him. A dealer would never ever consider something like this at all.
nannerpus, nannerpus
Joined: Jan 2003
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From: pungo
Re: Dealer service dept. revenues increase if they had reasonable prices?
..And how would everyone just magically know that dealerships are charging less for customer pay business? Your word of mouth? How would they explain that to the warranty company?
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Fanboi
Joined: Jun 2003
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From: Virginia Beach
Re: Dealer service dept. revenues increase if they had reasonable prices?
Internet wholesalers have to do hella massive volume to handle it, and the only reason sites such as the one you list can do it is because GM does not charge them for their shipments in, and their operating costs are covered by.....you guessed it......the Service Department.
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Fanboi
Joined: Jun 2003
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From: Virginia Beach
Re: Dealer service dept. revenues increase if they had reasonable prices?
But yes... if RK chevy started being reasonable with parts/servie the word of mouth would spread quickly. Say I myself started buying from them. I'd post about it on the car forums I'm on and tell my friends to buy parts from them. That's how it works.
DURRRRRRRRRRRRRRRRRR
Joined: Jan 2003
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From: Midlothian
Re: Dealer service dept. revenues increase if they had reasonable prices?
And I make my money by making lots of hours. The actual chunk of that $100/hr that gets to me is pitiful.
As for service vs sales, the service department keeps the lights on. You try to ensure the cars that you sell come back for this very reason - hence all the free oil changes for life, free S.I. for life, etc.
do a da cha cha
Joined: Jun 2006
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Re: Dealer service dept. revenues increase if they had reasonable prices?
Well going off book time either the dealer is a rip off or somebody's number's are inflated. Book time for a 2004 cts-v is 3.4. Round it of to 3.5 and you are looking at $315. Then msrp is 350 for the water pump so you have a grand total of $665. So that leave's $325 off the price you posted. Like I said maybe the dealer overcharged or the number's were exaggerated. But 6.5 hours on labor is outrageous.
do a da cha cha
Joined: Jun 2006
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Re: Dealer service dept. revenues increase if they had reasonable prices?
VR-4ever
Joined: Jul 2003
Posts: 11,708
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From: not in russia.
Re: Dealer service dept. revenues increase if they had reasonable prices?
Well going off book time either the dealer is a rip off or somebody's number's are inflated. Book time for a 2004 cts-v is 3.4. Round it of to 3.5 and you are looking at $315. Then msrp is 350 for the water pump so you have a grand total of $665. So that leave's $325 off the price you posted. Like I said maybe the dealer overcharged or the number's were exaggerated. But 6.5 hours on labor is outrageous.
And where did the magical $325 come from? LOL
I thought in my head when Adam said, "yeah, the dealer wants $990" that it was 6 hours book time, because the wholesale cost for the OEM water pump was $280 (list $350).
¯\(°_o)/¯
I do like driving the CTS-V.
S a D u B
Joined: Apr 2008
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From: Harrisonburg, VA
Re: Dealer service dept. revenues increase if they had reasonable prices?
But you just said that the customer brings the car in for warranty work and preventative maintenance, then when the car gets older/out of warranty they buy a new one becaue they like service. That would mean that customers are only doing customer-pay for preventative maintenance and that anyting major is covered under warranty. Thus customer-pay out of warranty is a rarity I guess.