Serious Question, Why do dealers charge so much for service?

[Scottbaru]

At my machine shop we charge $50/hr for machining time. We pay insurance and such, and buy a lot of cutting tools and equipment. Yesterday we recieved one of four new CNC mills ($100,000 each), and we're a small shop (35 guys). I'm comparing apples to oranges I'm sure. My local independent Audi shop has saved me buckets of $ over the dealer, similar equipment I see, looks like less beauracracy and the owner doesn't live on the lake.

[Panthasoccer4]

While im not a mechanic, i do sell tools as my part time job. We always have mechanics coming in to buy their own tools for working at garages. Most shops only offer air to their mechanics. As for the disposal fees... Im gonna guess its just another way to pad their collective wallets at dealers. Im also not sure but i think most shops have to pay fees and taxes for handling hazardous waste...

[swi66]

Years ago I woprked for a Ford Dealer. Just starting out and woefully lacking in a lot of the new tools I needed to be competitive. I very soon owed my soul to the Snap 0n man. I was not very successful as a mechanic there, because I was not very good at selling uneeded work like the rest of the techs were. I still had a conscience. The only way to get ahead at a lot of dealers is to sell more service, then you get a comission. Other wise you are trying to beat book time which can take only one tough job to ruin your week. Dealers also have a lot of overhead, so they charge a lot because they also have to train the technicians on the latest every year.

 

Nowadays Chrysler has the 5 star program which requires technicians to travel for certain training. I know one dealer who could not sell a Viper or a Prowler until he had a technician certified in their specific repair.......costs money to make money.

This weekend, my wife had been given a certificate for a "free" oil change at a local oil change chain. I normally do all of that, but figured I would use the certificate rather than do it myself in the cold garage. They tried selling me a $99 motor flush, $80 battery, a power steering fluid flush and change, a differential lube change, fuel injection service and a bunch of other stuff. If I had been gullible I could have spent $500 during my free oil change........this on my wifes 2000 Cherokee...........The only way these guys make a buck is to sell the extra service as that is where the profit is.............

swi66

[stevemeeters]

I would add to shimonmor's excellent list of reasons the following: Taxes- Fica, Medicare, Unemployment, Workman's Compensation. These things are huge and must not only be paid, but also be administered, meaning someone has to be paid to get it all done. I sometimes wonder why anyone would go into business at all, given the crap that has to be dealt with.

 

 

Tom

 

You're right that all these expenses must be covered. But don't indi shops have these same expenese too? Maybe the training and cert exepenses and probably the tools, but the health care, and the rest are the same.

[Subarunation 713]

Bridgman? There are no dealers around me, I'm planning to stop at a dealer in your area to get keys made, next time I go to O'Hare. Maybe I'd better drive a little farther?

I went to Team Subaru Suziki Nissan in South Bend, that is the nearest dealer to me as there is nothing in St Joe/Benton Harbor. For keys, I go to a good hardware store.

Greg

[scoobyclimbs]

quit whining ! go somewhere else. As a mechanic myself and 99% of all shops we buy our own tools!!! I've invested $30,000........and years of training....so give the mechanics a break! Yea I'm picky about my tools a craftsman tool just don't cut it vs a Snap-on or Mac, Matco.....The dealer is there to make money and mechanics are an expense to them. We don't make $75-100 an hour. The dealer gets all the profits. But unless you own business you really can't understand the cost of doing business . The dealer only charges what the market will bear.

 

Get a Haynes manual or cd rom, go to school and learn.......buy some tools! quit whining!

[Subarunation 713]

quit whining ! go somewhere else. As a mechanic myself and 99% of all shops we buy our own tools!!! I've invested $30,000........and years of training....so give the mechanics a break! Yea I'm picky about my tools a craftsman tool just don't cut it vs a Snap-on or Mac, Matco.....The dealer is there to make money and mechanics are an expense to them. We don't make $75-100 an hour. The dealer gets all the profits. But unless you own business you really can't understand the cost of doing business . The dealer only charges what the market will bear.

 

Get a Haynes manual or cd rom, go to school and learn.......buy some tools! quit whining!

You miss the point. It was not "Whining", it was a question to find out what the costs of doing business are for the dealer that are ABOVE and BEYOND the costs for a good independent shop.

 

I do have a manual, I do have tools and I do many of my own repairs. I will go someplace else as I always do save warranty and recall work. I am not whining I am just curious. I hope that is not a crime.

 

Greg

[shimonmor]

You're right that all these expenses must be covered. But don't indi shops have these same expenese too? Maybe the training and cert exepenses and probably the tools, but the health care, and the rest are the same.

 

Yes and no. A lot of independant shops are small and they may offer no benefits or limited benefits. In addition, they are not mired in bureaucracy (especially if they have less than 15 employees...I think that's the number).

 

And, when a small shops starts out they are usually cheaper but if they are good then they quickly expand and you'll see their prices skyrocket to dealer prices. Our shop rate about three years ago was $50/hr and know it's $85/hr and people keep coming.

[Johngenx]

The main benefits I have found from using indies over dealerships is that they will often forget the "fluff" part of the service, reducing the overall cost.

 

Example? My local dealer wants about $900 for a 96,000km service, and with taxes and waste disposal, it will come close to a grand. Most of the service is "checking" things like horn operation, lights operation, and so on. If you forget that stuff, do the fluids/filters and some crucial checks, you can cut the cost by 2/3.

 

The indies are typically willing to sacrifice the fluff part of the services (and the profit it generates) to build customer loyalty. It's my experience that labour rates for indies are only a bit less, or the same.

 

Here's an example...

 

My Mercedes had a CE light. The dealer would charge $100 to read the codes and about another $100 for "diagnosis" time. It was an Air Mass Meter, which takes about ONE minute to change, but they charge $100. So, for 15 minutes of time, they bill $300 labour and a $400 part. My indie charges nothing to pull the codes, and when he saw the codes and read the adaptation numbers, he knew what it was. It took about two minutes to read the codes and another two to get an AMM from stock and install it. He charged me the $400 for the part and the "labour" he chocked up to customer retention. Guess what? It works. He gets all my repair business, and on some stuff, he does very well. He only made about $60 on the AMM he installed, but for about five minutes work, that's not bad. There is the carrying cost of the AMM itself, but it's such a failure prone part on almost all MB models, they fly off the shelf anyway.

 

What really chuffs me about the Subaru dealer is that they have the most expensive services of any brand I have seen short of Porsche. Over the same mileage period, going only to dealers, my Mercedes would be HALF of either of our Subarus for service costs. I was not impressed by the cost of MB servicing by the dealer, and downright shocked at Subaru.

[SubaruLegacy2003]

My experience with idie's is that while sometimes they forgo the "fluff", sometimes you get shortchanged as well. My personal experience, with my '90 Honda Accord when it had around 120,000 miles with an independent shop that came highly recommended. I had brake work done and 120,000 mile service. Shortly after I had overheating problems, only on the highway, after a couple of trips back to the indie, he guessed head gasket. I took it back to the dealer and he had installed an aftermarket thermostat backwards. Replace with OEM and I never had a problem and sold the car with 225,000 on it, to get my Subaru. With the brakes, I had been averaging 50,000-60,000 miles per front set, got them done at the indie, 12 months later had noise, took it to the dealer, part of thier service when they do brake jobs involves some caliper maintenece, they had to rebuild both calipers due to lack of maintenence and the pistons froze. It was thier opinion that had the caliper maintence been done (as spelled out in the FSM) that my calipers would have been adequetly maintained.

 

So, my very limited indie experience has been that while you might save some $ up front, in the long run it ended up costing me significantly more that had I gone to the dealer in the first place. Believe me, I'm not painting all indies with the same brush, but if the question is why do dealers cost so much, in addition the previoulsly mentions benefit package, insurance, staff and other costs that grow with a larger business, in some cases maybe they do a more complete job, and stick closer to the FSM than some indies....

[diluded000]

Look at the social and economic reason the dealers can charge.

 

Socially, people move from place to place more than they used to. So while a dealer likes repeat customers, there are enough people coming and going that they can keep a steady stream of new customers coming in for high priced repairs. If I had ever lived in one place for more than several years, I would eventually know the good local mechanics from the bad ones. But I don't. So rather than risk randomly picking a bad mechanic I wind up where I know I will be charged a premium, but know the problem stands the best chance of being fixed.

 

Economically, it is really expensive to be without a car. In terms of time, nusiance, and possibly having to rent a car, being without one anywhere outside of a major metro area with good public transportation is an awful experience. This is one of the things I love about having an old Subaru as an extra car in the family; if one of the daily drivers is broken, I can take the time to fix it without the nusiance of being without a vehicle. (Both daily drivers are Nissans, so after four and five respective years they haven't needed a repair - but it could still happen.) Anyway, I think the expense of being without a car is the main reason the dealer service business model survives.

 

Now for the Sears story. The Sears in Greeley, CO will diagnose brakes for $15. I was having tires put on my '85 DL, and went ahead an opted to pay the $15 check-out fee. They quoted me around $850 to repair the brakes. I believe this included replacing every component they could think of in the braking system. (hill holder, master cyl, pistons, etc) I guess some people are conditioned to fear for lives when it comes to brakes, and would pay an $850 repair on a $500 vehicle. I laughed loud at them when they gave me that price. High priced repairs completed quickly with factory warrantied parts by factory trained technicains are understandable, but Sears behavior borders on criminal.

 

- James B

[subtswagon]

Hi there,

 

Talking about steep prices at the dealership, I just did my 48k service on my Impreza 03 and it stated the price of $465......well, it came up to $616.....of course I had to complain to the service manager about how come I have to pay certain parts when it should be included at the 48K.

 

they wanted to charge me for the air filter and fuel filter. They said, air filter may NOT necessary be change if it's not dirty? C'mon, after 48k, and 2 years later.......any air filter will be dirty....they think as a customer I don't have brains.....so, I beg to differ stating Subaru Maintainence Manual says to change air filter at 48K. And my other beef, it "Top up fluids"....I had to pay $1.96 for them to top up my washer fluid. What gives???

 

They should be up front about their prices and parts charges. Well, I finally convince the manager that's it not right to do such thing and not inform the customer. The end result, they brought down the price. But I'm still upset about the service. They should tell you what's included in black and white and what's not included. And have you seen their invoice???? It's terrible to understand their charges. And have you seen that section on "Miscellaneous charges"....no details on that...Grrrr.....By the way, I'm in Vancouver. Anyone has that issue to share as well? Thnx.

 

subtswagon

 

The main benefits I have found from using indies over dealerships is that they will often forget the "fluff" part of the service, reducing the overall cost.

 

Example? My local dealer wants about $900 for a 96,000km service, and with taxes and waste disposal, it will come close to a grand. Most of the service is "checking" things like horn operation, lights operation, and so on. If you forget that stuff, do the fluids/filters and some crucial checks, you can cut the cost by 2/3.

 

The indies are typically willing to sacrifice the fluff part of the services (and the profit it generates) to build customer loyalty. It's my experience that labour rates for indies are only a bit less, or the same.

 

Here's an example...

 

My Mercedes had a CE light. The dealer would charge $100 to read the codes and about another $100 for "diagnosis" time. It was an Air Mass Meter, which takes about ONE minute to change, but they charge $100. So, for 15 minutes of time, they bill $300 labour and a $400 part. My indie charges nothing to pull the codes, and when he saw the codes and read the adaptation numbers, he knew what it was. It took about two minutes to read the codes and another two to get an AMM from stock and install it. He charged me the $400 for the part and the "labour" he chocked up to customer retention. Guess what? It works. He gets all my repair business, and on some stuff, he does very well. He only made about $60 on the AMM he installed, but for about five minutes work, that's not bad. There is the carrying cost of the AMM itself, but it's such a failure prone part on almost all MB models, they fly off the shelf anyway.

 

What really chuffs me about the Subaru dealer is that they have the most expensive services of any brand I have seen short of Porsche. Over the same mileage period, going only to dealers, my Mercedes would be HALF of either of our Subarus for service costs. I was not impressed by the cost of MB servicing by the dealer, and downright shocked at Subaru.

[NoahDL88]

As a mechanic i have learned a few things, and after reading this i've also learned a few things.

 

1. The price per hour is relative to the price of the car, at the ford dealership i worked at the price was 80 an hour, the mercedes dealership next door charged 115 an hour.

 

2. Flatrate, you know about it before hand in the quote they give you. and sure most times it works in the techs favor, but sometimes you can get bit in the backside, electrical gremlins shoot flat-rate right out the door.

 

3. Yeah, we got air and overhead lights, after that if we needed it we got it off the truck, and paid dearly for it.

 

4. We charge so much because of overhead, the 30000 in tech training, and because its a business not a charity.

 

 

5. Most techs are honest. Period

 

6. last but not least, if you don't like paying so much at the dealership, spend two years at school to learn how to fix your car, buy about 4000 dollars worth of tools and do it all yourself.

[scoobyclimbs]

right on Noah! I'm with ya

[frag]

As a mechanic i have learned a few things, and after reading this i've also learned a few things.

 

1. The price per hour is relative to the price of the car, at the ford dealership i worked at the price was 80 an hour, the mercedes dealership next door charged 115 an hour.

 

2. Flatrate, you know about it before hand in the quote they give you. and sure most times it works in the techs favor, but sometimes you can get bit in the backside, electrical gremlins shoot flat-rate right out the door.

 

3. Yeah, we got air and overhead lights, after that if we needed it we got it off the truck, and paid dearly for it.

 

4. We charge so much because of overhead, the 30000 in tech training, and because its a business not a charity.

 

 

5. Most techs are honest. Period

 

6. last but not least, if you don't like paying so much at the dealership, spend two years at school to learn how to fix your car, buy about 4000 dollars worth of tools and do it all yourself.

 

I think this is uncalled for and specialy no 6. If your read carefully, the first poster's message, you'll see that he is just asking an honest question and doing it politely, trying not to offend anyone. I think he should at least be given the same treatment.

[NoahDL88]

I am anxious to hear from you dealer people,

Greg

 

Subarunation wanted to know, and i gave my .02, i'm sorry that i offended you, so many people have posted their opinion, and i gave mine.

 

And 6 is the most true of them all, Nation, this isn't a personal attack, just an opinion, you get paid for the skill you have, ie: fixing cars is hard, and flipping burgers is not, the pay is set accordingly.

[FindingForester]

The practices at a dealer's service department IMHO generally mirror the policies set by management. I've had good and bad experiences with dealer service (not just Subaru), from honest ones that do and charge for exactly what was needed, to ones that pad the bill by $20 to $30 with things like uncalled-for oil or windshield wash additives (funny how the additives don't seem to reduce the amount of oil or fluid they charge for). If management presses service writers to boost profitability, they'll try to sell services or goods that the customer doesn't need or doesn't need yet. Your best defense against this sort is knowledge.

 

Most dealer service departments I've dealt with are good, but pricey. That's why it makes sense to know what services should be adequately handled by a good indie and which are best left to a dealer.

 

As others have pointed out, many car owners don't know anything about their cars or are too busy to bother. They are the low-hanging fruit for many sellers of auto service, both indie or dealer.

[Syonyk]

6. last but not least, if you don't like paying so much at the dealership, spend two years at school to learn how to fix your car, buy about 4000 dollars worth of tools and do it all yourself.

 

Wow... $4000 of tools? $400, maybe... (at least for most DIY jobs on an older car)

 

Regarding service places (both dealers & non) and adding services, a few of my friends have in the past worked at Jiffy Lube & other such places.

 

A while back, Jiffy Lube managers were under heavy pressure to have an average cost per car of $65 or so. When an oil change is $25, you need to add a lot of services. I suspect this is also related to the fact that Jiffy Lube now charges for topping off fluids between changes (it used to be free). I now no longer go there at all (though having my own garage to change oil & such has been a big part of that).

 

I really don't think the problem is techs being dishonest of their own accord, but pressure from management either tying their pay to the amount they can convince a customer to spend, or saying "Average X amount of additional work per car, or you'll be looking for another job."

 

That said, I don't take any of my cars to shops anymore.

 

-=Russ=-

[xt6quebec]

hi, this is my first post, but i've been a member for about 2 years. I just didn't have a subaru anymore but I recently purchased an Impreza. I work for an Acura dealer, i'm a technician, I used to work for Volkswagen and things are really different here... It doesn't have anything to do with the companies but more with the dealer itself. Here you won't get charged for the shop supplies (brake cleaner, grease, etc.) BUT someone has to pay for it. We charge $70/hour CND, with that amount you pay the tech, but also a part of rent or taxes for the building, must pay service advisor, manager, parts guy and other "support" staff. You end up not charging enough money, so you take a little profit from the parts (about 10 to 35 %) and that still not enough. Only choice left is to charge more time than needed (flat rate comes in) ie. it takes 45 minutes to change brake pads, we charge 1.5 hours. If for some reason a problem occurs, a seized pin or something, we still charge 1.5 hours. If you go to an independant shop, maybe they'll charge less time, they probably charge less for an hour, but make between 50 and 200% profit on parts. Here at the dealer, we have to sell the part what it's listed, not necesarily what it's worth... we can't change prices, that makes us a little more expensive. And in the end, one can be REALLY more competent in a indie shop than a dealer trained tech. A Certificate is just a piece of paper... you have to trust who you do business with, if you don't trust them(for whatever reason) just go somewhere else. one last thing, cheaper doesn't mean worse or better, it just means cheaper.

[subie94]

 

Then, despite the higher costs, they have no luxury services. No loaner cars, no included detailing, a crappy waiting area with one lousy chair, no free coffee or other drinks, and so on. For the price they charge, I would expect some serious pampering.

 

I love the cars, but the dealers (here, anyway) suck.

 

 

the dealer in my town gives you two big comfy couches along with a love seat,plus you get to watch cable tv.the dealership in the next town over has a limo for a shuttle car.

[SevenSisters]

Why do dealers charge so much?

Why do dogs lick their balls?

 

Because they can!

 

God bless the techs, but when the dealer charged me $10 to add some Krex crap at my first oil change, I bought the tools and started doing my own work.

 

When the ‘ru sounded like an airplane, was $300 too much for a Hubtamer? Yes, but I learned something about my car, still have the tool for the next wheel bearing failure, and paid less overall than having a dealer do it.

 

The techs are just making a living, the dealers own the boats.

 

[Scoobaroo]

: fixing cars is hard, and flipping burgers is not, the pay is set accordingly.

 

Fixing cars is not hard. It's greasy, dirty work, but it's not rocket science.

$100 worth of mid-quality Chinese tools and a little common sense will get one through 95% of repairs on a Subaru. Puying a few hundred $$ more in speciality tools will have one able to repair 100% of the car if one has mechanical aptitude.

 

Subaru Techs learn by "Osmosis"; rarely from training or gifted insight.

They see the same problems over and over again; week after week, month after month. It's not as if they need to diagnose your problem from scratch each time that you show up for repairs. Chances are they've seen the problem that your car is having hundreds of times.

 

Prices are set by greedy management. Mom and Pop dealships are being gobbled up by "MegaPlex" dealerships. Of course the "MegaPlex" management seeks to recoup the cost of buying smaller dealerships by taking the money out of somebodys (the customer's) hide.

 

Customers keep paying, so management keeps raking in the dough.

 

Upper management usually isn't intelligent enough to think of new and innovative ways to increase earnings, so they simply shove their greed down the "totem pole" to the lower managers and technicians and threaten their jobs if they fail to adopt their greedy, crooked ways.

[Seahag1978]

I was dead serious when I posted that they had to cover the cost of re-fixing the car when it got screwed up.

 

I work in an environment where the risk of having to re-do work is very high... the starting price has to cover the cost of having to re-do it and NOT lose money... it doesn't very happen often, but having that "cushion" makes it as if the job never happened.

 

Every business, no matter the size has the same costs based on volume and perks. Realistically, the "techs" should make 1/4 of the price charged... 1/2 goes to overhead (health isurance, workers comp, lights, heat, snow removal, uniforms, soap, rags, free coffee for customers in the lounge etc.) and 1/4 reserved in the likely event that another tech will need to fix a misdiagnosis.

 

A good mechanic will usually charge less because he's got more confidence in his ability to do it right the first time... he depends upon himself.

 

Keeping good help in a dealership is tough... the good ones go out on their own, or work for an indy where the pay is according to skill.

[SakoTGrimes]

1. Because they can.

(a) because they know new car owners will pay it

[slo5oh]

hi, this is my first post, ... cheaper doesn't mean worse or better, it just means cheaper.

 

Great post xt6quebec!

 

I started working on my own cars at 16. I started with simple things like spark plugs (splitfires suck!) and changing the battery. Luckily I have a vast network of friends. One is probably the smartest car guy (IMHO) in the world. When the starter went out in my toyota he showed me how to rebuild it for free instead of spending $180 on a new or new-referb. A couple years later I ended up taking my mustang (heavily modified) to a indie shop where the owner (this is a one man shop) was a racer. He had my car for 2 weeks and I spent about 1500 dollars for him to "fix" it. He didn't even discover the problem (I know now it was because the timing was off about 30 degrees), he had to send it out to a mustang specific shop. For that 1500 I also had him put a new clutch in and I think he put a 2.5" H-pipe on. I still felt ripped off. I spent over $1000 for him to scratch his balls and know less than I did. That day I vowed I would never take any of my cars to a shop again. The only times I've gone against that are for simple things like oil changes and tires, although I still take it to a friend. I've recently become involved in trying to repair a newer saturn that had serious problems. After a few failed attempts at discovering the poblem I had the owner take it to Saturn for a "diagnostic". $85 told us that it had a bad MAF (a $200 repair) and a bad Transmission Pressure Solonoid ($800 to $1000 repair). It seems to be a common problem and I think saturn did a recall for specific years, but not this year.

I did some research and found a great saturn website that eventually convinced me the whole problem is from the bad MAF. I replaced the MAF reset the ECU and saved the owner well over $1000. It's been 2 weeks now and the car is running like new.

I've been thinking about taking that "diagnosis" back down the dealer and asking them why the retards at the Saturn service department don't know as much about their own cars as a bunch of bassackwards "shade tree" mechanics do!!!

 

my $.02... save your money, do it yourself, even if you %U#K it up the first time you still end up ahead.