Direct Manufacturer Sales to Car Buyers
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Originally Posted By: mechanicx
If we didn't have all these middlemen, what work would we be left with lol? Maybe if we put all these middlemen to work actually doing something like manufacturing and designing instead of outsourcing it, then ironically we might even be able to actually afford some middlemen
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LOL true.
If we didn't have all these middlemen, what work would we be left with lol? Maybe if we put all these middlemen to work actually doing something like manufacturing and designing instead of outsourcing it, then ironically we might even be able to actually afford some middlemen
LOL true.
If we buy direct from the manufacturer, how do we handle test drives? I would never buy a car without driving it first. The salesmen may be a pain, but I can handle that simply by being upfront. Never had a bad experience, but I am forthright and polite with everyone I have talked to. Plus, I don't mind negotiating. If you don't like to negotiate, pay sticker like you do for almost everything else.
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Originally Posted By: bdcardinal
Originally Posted By: Quattro Pete
Aren't the costs of warranty repairs just billed by the dealer service dept back to the manufacturer?
At a reduced rate yes. Out normal labor rate is $119.95 an hour, for warranty it is around $98.20 last I checked. Also the number of hours a tech can flag is much lower. Lets say a job that normally will pay 5 or 6 hours if CP will pay 1.2 with warranty. The technicians take home is the same hourly rate for CP or warranty, they just get to flag less on warranty. Also there is the issue of a lot of dealers will put the "certified" techs on only warranty work and have the non certified techs doing all the CP work since they can't to warranty.
And yes dealers make very little on new cars nowadays. I have seen brand new cars with less than $1000 of profit built into the price. Used cars are where the money is at.
How is the techs take home rate the same whether it's CP or warranty. He gets paid for what he flags. That is unless he's on a straight salary. That's why most guys hate doing warranty work, because they pretty much always under pay the job.
Originally Posted By: Quattro Pete
Aren't the costs of warranty repairs just billed by the dealer service dept back to the manufacturer?
At a reduced rate yes. Out normal labor rate is $119.95 an hour, for warranty it is around $98.20 last I checked. Also the number of hours a tech can flag is much lower. Lets say a job that normally will pay 5 or 6 hours if CP will pay 1.2 with warranty. The technicians take home is the same hourly rate for CP or warranty, they just get to flag less on warranty. Also there is the issue of a lot of dealers will put the "certified" techs on only warranty work and have the non certified techs doing all the CP work since they can't to warranty.
And yes dealers make very little on new cars nowadays. I have seen brand new cars with less than $1000 of profit built into the price. Used cars are where the money is at.
How is the techs take home rate the same whether it's CP or warranty. He gets paid for what he flags. That is unless he's on a straight salary. That's why most guys hate doing warranty work, because they pretty much always under pay the job.
Dealerships have elaborate contracts these days that require them to spend many millions to just meet appearance guidelines, not to mention outrageous expenses associated with any huge retail business with hundreds of employees, etc.
Warranty work has changed tremendously and is frequently charged back, adjusted, etc. as mfgrs are cracking down hard on Stealerships.
No single dealer anywhere likely makes half a billion, even gross. And their net is likely less than 10%.
The envious nature of some posts here would lead me to believe that the popular media is driving some folks opinions. Those who think that Stealerships somehow make too much money need to open their own business as soon as possible and compete!
Better bring the checkbook!
Warranty work has changed tremendously and is frequently charged back, adjusted, etc. as mfgrs are cracking down hard on Stealerships.
No single dealer anywhere likely makes half a billion, even gross. And their net is likely less than 10%.
The envious nature of some posts here would lead me to believe that the popular media is driving some folks opinions. Those who think that Stealerships somehow make too much money need to open their own business as soon as possible and compete!
Better bring the checkbook!
I heard this radio spot on the same subject a few days ago:
http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes
The audio and transcript are more detailed than the text on the linked page.
http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes
The audio and transcript are more detailed than the text on the linked page.
Originally Posted By: buster
I'm in favor of anything that involves less involvement with sales people.
Don't forget the service side of things either, they also make a killing cheating customers and manufacturers alike, they don't call them "stealerships" for nothing.
Unless a vehicle is under a manufacturers warranty go somewhere else.
I apologize to the two dozen dealerships out there that are honest businesses not trying to cheat the customer.
I'm in favor of anything that involves less involvement with sales people.
Don't forget the service side of things either, they also make a killing cheating customers and manufacturers alike, they don't call them "stealerships" for nothing.
Unless a vehicle is under a manufacturers warranty go somewhere else.
I apologize to the two dozen dealerships out there that are honest businesses not trying to cheat the customer.
Originally Posted By: AdRock
Originally Posted By: bdcardinal
Originally Posted By: Quattro Pete
Aren't the costs of warranty repairs just billed by the dealer service dept back to the manufacturer?
At a reduced rate yes. Out normal labor rate is $119.95 an hour, for warranty it is around $98.20 last I checked. Also the number of hours a tech can flag is much lower. Lets say a job that normally will pay 5 or 6 hours if CP will pay 1.2 with warranty. The technicians take home is the same hourly rate for CP or warranty, they just get to flag less on warranty. Also there is the issue of a lot of dealers will put the "certified" techs on only warranty work and have the non certified techs doing all the CP work since they can't to warranty.
And yes dealers make very little on new cars nowadays. I have seen brand new cars with less than $1000 of profit built into the price. Used cars are where the money is at.
How is the techs take home rate the same whether it's CP or warranty. He gets paid for what he flags. That is unless he's on a straight salary. That's why most guys hate doing warranty work, because they pretty much always under pay the job.
Their hourly rate is the same, they make $XX per flagged hour no matter if it is internal, CP, or warranty. They just flag less hours on warranty for the same job as opposed to CP. Also some of the "extended warranty" companies you see on TV only pay 1/3 of the normal flat rate and will supply their own used parts.
Originally Posted By: bdcardinal
Originally Posted By: Quattro Pete
Aren't the costs of warranty repairs just billed by the dealer service dept back to the manufacturer?
At a reduced rate yes. Out normal labor rate is $119.95 an hour, for warranty it is around $98.20 last I checked. Also the number of hours a tech can flag is much lower. Lets say a job that normally will pay 5 or 6 hours if CP will pay 1.2 with warranty. The technicians take home is the same hourly rate for CP or warranty, they just get to flag less on warranty. Also there is the issue of a lot of dealers will put the "certified" techs on only warranty work and have the non certified techs doing all the CP work since they can't to warranty.
And yes dealers make very little on new cars nowadays. I have seen brand new cars with less than $1000 of profit built into the price. Used cars are where the money is at.
How is the techs take home rate the same whether it's CP or warranty. He gets paid for what he flags. That is unless he's on a straight salary. That's why most guys hate doing warranty work, because they pretty much always under pay the job.
Their hourly rate is the same, they make $XX per flagged hour no matter if it is internal, CP, or warranty. They just flag less hours on warranty for the same job as opposed to CP. Also some of the "extended warranty" companies you see on TV only pay 1/3 of the normal flat rate and will supply their own used parts.
right, but the effect is the same.
At the volvo dealership I worked for, warranty paid around 1/2 the amount as customer pay.
And warranties are getting longer and longer.
Btw, volvo capped (for the dealership) the flat rate billing at $85/hr. We charged customers $105/hr. The audi dealer down the street was $140...
So not only are the number of billable hours cut in half by the manufacturer for warranty repairs, but the hourly rate, for the dealership, was capped, too.
$85 is fair imho and the $105 we charged was greedy, but, I can see that a dealership in an expensive urban area trying to pay their hugely expensive monthly rent/lease, would need to charge more.
I realize bdcardinal said much the same thing; just is just a corroborating example from another brand's dealership.
At the volvo dealership I worked for, warranty paid around 1/2 the amount as customer pay.
And warranties are getting longer and longer.
Btw, volvo capped (for the dealership) the flat rate billing at $85/hr. We charged customers $105/hr. The audi dealer down the street was $140...
So not only are the number of billable hours cut in half by the manufacturer for warranty repairs, but the hourly rate, for the dealership, was capped, too.
$85 is fair imho and the $105 we charged was greedy, but, I can see that a dealership in an expensive urban area trying to pay their hugely expensive monthly rent/lease, would need to charge more.
I realize bdcardinal said much the same thing; just is just a corroborating example from another brand's dealership.
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Originally Posted By: antiqueshell
they don't call them "stealerships" for nothing.
Unless a vehicle is under a manufacturers warranty go somewhere else.
I apologize to the two dozen dealerships out there that are honest businesses not trying to cheat the customer.
I really think your number is quite optimistic!!! Not sure there's ANY honest ones around here...
they don't call them "stealerships" for nothing.
Unless a vehicle is under a manufacturers warranty go somewhere else.
I apologize to the two dozen dealerships out there that are honest businesses not trying to cheat the customer.
I really think your number is quite optimistic!!! Not sure there's ANY honest ones around here...
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