Now, if your not the vehicle’s original owner, didn’t buy the car from the dealer, it has over 100,000 miles, you didn’t get an extended warranty policy, and your idea of maintenance is changing the oil on rainy days when there’s nothing better to do, here are some other options you may consider when faced with a major repair.
1. Ask about using after-market (different manufacturer’s) parts. They wont carry the same warranty coverage as the factory parts but if the work has to be done and you don’t have the money, it’s a viable option since parts are often more costly than labor.
2. Depending on what failed, used parts are sometimes available and reliable. Salvage yards have come a long way since I was a kid rummaging around at the old car graveyard. Many places now inspect, clean and test their parts before selling them, and offer a warranty. I would never suggest buying used air conditioning, transmission or internal engine parts, but items like windows, door hinges, wheels and such are pretty safe bets.
3. Last but not least, shop around. Depending on the repairs needed, a specialty shop can be cheaper than a general repair facility – dealer or independent. For example, a torn seat can be repaired with a new seat cover for $500 or an auto upholstery shop may be able to sew in a new section for half the price. Transmission shops, tire stores, car stereo shops – are all geared toward that one specific type of repair; therefore, they can often do the work cheaper and pass the savings on to the consumer.
4. Ask your service advisor, mechanic, etc if there’s any way to reduce the cost. This goes back to the basic concept of having a repair facility that you trust.
I recently dealt with a failure on my Saturn that involved a $1400 repair quote. Following my own advice, I asked my service advisor for consideration since I purchased the vehicle there. She offered a 10% discount. Appreciative, but still grieving at the expense during the holiday season, I called Saturn Corporation. I plead my case – a two-time Saturn buyer, loyal to the local dealer, having to replace a part that “rarely ever fails” as I was told by various sources. I asked for help with the cost not full coverage. They contacted the service manager at the dealership and he called me with an offer I couldn’t refuse.
Saturn of Port Richey comes through again!
It is so important to choose a mechanic and/ or dealership as you would a doctor. Don’t just look in the phone book or believe everything you hear on television. Ask around, check with the better business bureau and consumer driven, on-line services, like Angie’s List.
Thanks for visiting my Blog - I hope this helps...
Tuesday, December 25, 2007
Saturday, December 15, 2007
Dealing with Failures (of the mechanical type)
It is said that the sales department sells the first car but the service department sells every subsequent car. If you like the salesman and the product, you’ll buy the car, but if you get exceptional service after the sale, you’ll come back to possibly buy again.
That said, the service department is committed not only to profits margins but to their customer satisfaction index (CSI) as well. As with sales, prices quoted in the service and parts department are flexible and dynamic. Dynamic in a sense that a door handle for a Cadillac will cost more than a door handle for a Chevrolet, and suggested parts prices are update from GM on a weekly basis. Unlike a new car that has a window sticker displaying the suggested retail price that stays there until the car’s sold, a part at one dealership will not necessarily cost the same as at another dealership – and that's why the pricing is flexible. Dealerships are independently owned and operated and create their own pricing matrix. Like buying gasoline, you can shop around for new parts. Like comparing gas prices, it’s up to you to decide whether it’s justified to drive all over town for the amount that you may save.
Just as when buying a car, if you’re buying an expensive part or service, ask if that’s the best price they can offer you. Ask if there are any discounts available for repeat customers, customers who bought the car there, senior citizens, members of the local car club, etc. Don’t expect them to just offer discounts since, as we said last week, everyone works on commission. I was recently given a $1400 repair quote from my local Saturn dealer. I lamented over such a great expense during the holidays and asking if there any thing she could do to lower the cost, I was offered a 10% discount since I bought the car there. That’s $140 saved by asking for consideration.
Another avenue available when faced with an expensive repair is contacting the manufacturer. Tell the customer assistance agent how you have been a loyal customer, have owned several of these vehicles and how this one is disappointing you. Tell them how you like the dealership and want them to make the repairs, but you can’t understand how such a well maintained vehicle could have such a catastrophic failure.
If you have a good case, they will likely offer help. Manufacturers spend millions of dollars in advertising trying to get new customers – a few hundred dollars to keep a customer is a worthy investment.
Here are some points (as they apply) that you want to be sure to include in your conversation with customer assistance: (be sure to have your VIN handy before calling)
1. You purchased the car/ truck new or certified used from one of their dealers.
2. You have purchased their products before and would like to again in the future.
3. You maintain the vehicle well and have all the maintenance records and/ or they can be confirmed by the dealership.
4. You understand that you’re out of warranty but… (this is where you need a business case such as: I never had a car with a failure like this before; The cost seems excessive; I was told that this is a common failure; I maintain the car well and don’t feel I am responsible for this.) …so I think you should help me with the repair expense.
5. Be reasonable in your request. They may ask you to bring it back for further testing or to a different dealer for a second opinion. They don’t know you, cant see the vehicle but have to substantiate any goodwill gestures. If they don’t feel they can do that they will simply tell you so.
6. Gratitude is always appreciated. If the manufacturer agrees to help that often means the repair becomes a warranty claim with you making a co-payment. The service advisor, parts department and technician all make less commission on the repair than if you were paying the whole bill.
Remember to thank them for helping you - you may have to ask again someday.
That said, the service department is committed not only to profits margins but to their customer satisfaction index (CSI) as well. As with sales, prices quoted in the service and parts department are flexible and dynamic. Dynamic in a sense that a door handle for a Cadillac will cost more than a door handle for a Chevrolet, and suggested parts prices are update from GM on a weekly basis. Unlike a new car that has a window sticker displaying the suggested retail price that stays there until the car’s sold, a part at one dealership will not necessarily cost the same as at another dealership – and that's why the pricing is flexible. Dealerships are independently owned and operated and create their own pricing matrix. Like buying gasoline, you can shop around for new parts. Like comparing gas prices, it’s up to you to decide whether it’s justified to drive all over town for the amount that you may save.
Just as when buying a car, if you’re buying an expensive part or service, ask if that’s the best price they can offer you. Ask if there are any discounts available for repeat customers, customers who bought the car there, senior citizens, members of the local car club, etc. Don’t expect them to just offer discounts since, as we said last week, everyone works on commission. I was recently given a $1400 repair quote from my local Saturn dealer. I lamented over such a great expense during the holidays and asking if there any thing she could do to lower the cost, I was offered a 10% discount since I bought the car there. That’s $140 saved by asking for consideration.
Another avenue available when faced with an expensive repair is contacting the manufacturer. Tell the customer assistance agent how you have been a loyal customer, have owned several of these vehicles and how this one is disappointing you. Tell them how you like the dealership and want them to make the repairs, but you can’t understand how such a well maintained vehicle could have such a catastrophic failure.
If you have a good case, they will likely offer help. Manufacturers spend millions of dollars in advertising trying to get new customers – a few hundred dollars to keep a customer is a worthy investment.
Here are some points (as they apply) that you want to be sure to include in your conversation with customer assistance: (be sure to have your VIN handy before calling)
1. You purchased the car/ truck new or certified used from one of their dealers.
2. You have purchased their products before and would like to again in the future.
3. You maintain the vehicle well and have all the maintenance records and/ or they can be confirmed by the dealership.
4. You understand that you’re out of warranty but… (this is where you need a business case such as: I never had a car with a failure like this before; The cost seems excessive; I was told that this is a common failure; I maintain the car well and don’t feel I am responsible for this.) …so I think you should help me with the repair expense.
5. Be reasonable in your request. They may ask you to bring it back for further testing or to a different dealer for a second opinion. They don’t know you, cant see the vehicle but have to substantiate any goodwill gestures. If they don’t feel they can do that they will simply tell you so.
6. Gratitude is always appreciated. If the manufacturer agrees to help that often means the repair becomes a warranty claim with you making a co-payment. The service advisor, parts department and technician all make less commission on the repair than if you were paying the whole bill.
Remember to thank them for helping you - you may have to ask again someday.
Monday, December 10, 2007
Dealership Operations Part2 – Service and Parts
As with the sales department, most service, parts and body shop employees are paid for what they produce, not by the hour. The friendly people who take your information and write down you requests and concerns are commonly known as service advisors. Their pay scales and plans vary but most are paid a salary plus commission. The commission is usually based on the amount of customer paid work they have taken in and sold. Repairs covered by warranty are not typically included. The manufacturers frown on commissioning warranty repairs since they do not want to encourage selling warranty repairs to the customers. If a covered item is broken, it will be fixed and paid for by the manufacturer. Warranty coverage is a given – it’s not something that has to be packaged, advertised and sold to a customer. Therefore the service advisor has little to do with it.
Next, the vehicle is taken back to a technician for the requested service or repairs. Technicians work on a system known as flat rate. Simply stated, each and every service procedure is given a flat rate time (an average time to do the work). The technician is credited that amount of time when the task is completed regardless of how much time he/ she has actually spent. The theory is that a more experienced, better skilled technician will accomplish a task in less time than a lesser technician. Both are expected to accomplish the same goal with the same level of quality, but the superior technician has the opportunity to make more money by beating the allotted flat rate time.
The system works pretty well at keeping people motivated, and accountable, if properly implemented. To help maintain quality standards, any job that has to be re-done is performed at no charge. Therefore, neither the service advisor nor the technician make any money and miss out on opportunities to do so from other customers.
When it comes to warranty work, many people are under a misconception that warranty coverage means the dealership is performing the repairs for free and not making a profit – wrong. When something is covered under warranty, whether it’s a new car warranty, extended warranty, certified used car coverage, recalls, etc, the service and parts departments are making money. Overall, they may make less money on a warranty repair than if the customer were paying, but it’s still good business for the department.
The parts department receives updates from the manufacturer informing them of price changes – this happens more often than you think, and the price changing is the dealer’s cost. Each parts department sets up a pricing structure or matrix which sets the retail prices for a particular item. Small, inexpensive items are usually marked up more than larger items. Prices also inversely correlate to the supply and demand rule of business. The more popular an item is, the more competitive the price will be. Odd items that typically don’t need replacement (like interior trim pieces) must be special ordered and are disproportionately expensive.
Courtesy transportation is a provision of the warranty, but most dealers offer it to all service customers in the way of a shuttle service. Typically the shuttle will take you to work, home, or a local shopping mall is you’d like. See courtesy transportation on the Tips page for more information. By the way, the service department also gets reimbursed for every shuttle ride, rental car, etc as long as the vehicle is under warranty and a warranty repair is performed. So if you are told that they need to keep your vehicle overnight to complete a warranty repair, ask for a rental car – you’re entitled to it.
So to recap, almost everyone is working on commission in the service department which is not necessarily a bad thing. Everyone prefers customer pay work, but don’t do warranty work for free. As with the sales department, prices are negotiable. A $19.95 oil and filter change special isn’t but a $500.00 repair is. There will be more on how and why next week.
Next, the vehicle is taken back to a technician for the requested service or repairs. Technicians work on a system known as flat rate. Simply stated, each and every service procedure is given a flat rate time (an average time to do the work). The technician is credited that amount of time when the task is completed regardless of how much time he/ she has actually spent. The theory is that a more experienced, better skilled technician will accomplish a task in less time than a lesser technician. Both are expected to accomplish the same goal with the same level of quality, but the superior technician has the opportunity to make more money by beating the allotted flat rate time.
The system works pretty well at keeping people motivated, and accountable, if properly implemented. To help maintain quality standards, any job that has to be re-done is performed at no charge. Therefore, neither the service advisor nor the technician make any money and miss out on opportunities to do so from other customers.
When it comes to warranty work, many people are under a misconception that warranty coverage means the dealership is performing the repairs for free and not making a profit – wrong. When something is covered under warranty, whether it’s a new car warranty, extended warranty, certified used car coverage, recalls, etc, the service and parts departments are making money. Overall, they may make less money on a warranty repair than if the customer were paying, but it’s still good business for the department.
The parts department receives updates from the manufacturer informing them of price changes – this happens more often than you think, and the price changing is the dealer’s cost. Each parts department sets up a pricing structure or matrix which sets the retail prices for a particular item. Small, inexpensive items are usually marked up more than larger items. Prices also inversely correlate to the supply and demand rule of business. The more popular an item is, the more competitive the price will be. Odd items that typically don’t need replacement (like interior trim pieces) must be special ordered and are disproportionately expensive.
Courtesy transportation is a provision of the warranty, but most dealers offer it to all service customers in the way of a shuttle service. Typically the shuttle will take you to work, home, or a local shopping mall is you’d like. See courtesy transportation on the Tips page for more information. By the way, the service department also gets reimbursed for every shuttle ride, rental car, etc as long as the vehicle is under warranty and a warranty repair is performed. So if you are told that they need to keep your vehicle overnight to complete a warranty repair, ask for a rental car – you’re entitled to it.
So to recap, almost everyone is working on commission in the service department which is not necessarily a bad thing. Everyone prefers customer pay work, but don’t do warranty work for free. As with the sales department, prices are negotiable. A $19.95 oil and filter change special isn’t but a $500.00 repair is. There will be more on how and why next week.
Sunday, December 2, 2007
Dealership Operations Part 1 - Sales
Many automotive patrons are unaware that nearly every employee they speak with is working on a commission basis. This revelation seems to answer many questions for people.
Aside from clerical and support staff, sales, service, parts, and body shop employees and managers are dependant on profits for their pay. The quasi-socialist theory is good – everyone works hard for the organization, everyone gets paid well. As with socialism though, the downfall is corruption and greed.
This is what separates good shops from the bad.
I’m sure few would be surprised to hear that that sales people work on commission – that’s why they’re so delightful when you’re looking at a sticker price and slowly morph to a barely tolerant state when you start talking rebates, discounts, incentives and just how much you know your trade-in is worth.
But what you may not realize is that the finance manager who is so non-judgmental, understanding and kind as he or she struggles to secure the best possible financing rate is also being compensated very well by the financial institutions they promote. Few know that the finance rate itself is negotiable. Here's an example:
I recently purchased a GMC Acadia. The finance manager assured me he worked out the best possible rate for me at 10.75%. I called my credit union and financed at 6.25%. Over the course of six years, I’ll save over $4000.00.
Additionally, all of the add-ons they promote are similarly padded. Paint protectants, tire warranties, window tint, striping, etc are all cash cows for the dealer. The only valuable item, extended warranty coverage, may be regulated by the insurance commission – depending on the state – so it may have a fixed price. But even then, if you want to save a few dollars, you could pass on the extended coverage from your dealer and instead purchase the plan over the internet from a dealer in a state that does discount the policy price. It worked for my doctor, but there is a time frame (I think 6 months) that you have to work with.
So, before going to check out the latest models, I suggest:
1. Research how much your trade in is worth ( www.kbb.com www.edmunds.com www.autotrader.com )
2. Call your bank, credit union, current finance company, and find out what kind of interest rate is available.
3. Research the type of vehicle that will suite your needs within your budget. We visited the New Car Autoshow – kids and all so that we could sit in each and every considered model.
4. Check for any and all incentives, rebates and special financing available in your region. ( http://www.gm.com/shop/currentoffers )
5. Don’t be swayed by overpriced add-ons. If you want the window tint, stripes, etc, ask the service department who does their custom striping work and then contact them directly.
6. It’s always best to shop toward the end of the month since everyone is working on a monthly goal or quota.
One final note – this information is general and likely applies to every dealership in your town. Regardless of manufacturer, domestic or foreign, the automobile industry has operated the same way for many years. Companies that post their best price on the window sticker and refuse to negotiate, will still negotiate interest rates, trade value, etc.
Next week we’ll discuss my forte’, the service and parts departments.
Thanks for visiting my blog!
Aside from clerical and support staff, sales, service, parts, and body shop employees and managers are dependant on profits for their pay. The quasi-socialist theory is good – everyone works hard for the organization, everyone gets paid well. As with socialism though, the downfall is corruption and greed.
This is what separates good shops from the bad.
I’m sure few would be surprised to hear that that sales people work on commission – that’s why they’re so delightful when you’re looking at a sticker price and slowly morph to a barely tolerant state when you start talking rebates, discounts, incentives and just how much you know your trade-in is worth.
But what you may not realize is that the finance manager who is so non-judgmental, understanding and kind as he or she struggles to secure the best possible financing rate is also being compensated very well by the financial institutions they promote. Few know that the finance rate itself is negotiable. Here's an example:
I recently purchased a GMC Acadia. The finance manager assured me he worked out the best possible rate for me at 10.75%. I called my credit union and financed at 6.25%. Over the course of six years, I’ll save over $4000.00.
Additionally, all of the add-ons they promote are similarly padded. Paint protectants, tire warranties, window tint, striping, etc are all cash cows for the dealer. The only valuable item, extended warranty coverage, may be regulated by the insurance commission – depending on the state – so it may have a fixed price. But even then, if you want to save a few dollars, you could pass on the extended coverage from your dealer and instead purchase the plan over the internet from a dealer in a state that does discount the policy price. It worked for my doctor, but there is a time frame (I think 6 months) that you have to work with.
So, before going to check out the latest models, I suggest:
1. Research how much your trade in is worth ( www.kbb.com www.edmunds.com www.autotrader.com )
2. Call your bank, credit union, current finance company, and find out what kind of interest rate is available.
3. Research the type of vehicle that will suite your needs within your budget. We visited the New Car Autoshow – kids and all so that we could sit in each and every considered model.
4. Check for any and all incentives, rebates and special financing available in your region. ( http://www.gm.com/shop/currentoffers )
5. Don’t be swayed by overpriced add-ons. If you want the window tint, stripes, etc, ask the service department who does their custom striping work and then contact them directly.
6. It’s always best to shop toward the end of the month since everyone is working on a monthly goal or quota.
One final note – this information is general and likely applies to every dealership in your town. Regardless of manufacturer, domestic or foreign, the automobile industry has operated the same way for many years. Companies that post their best price on the window sticker and refuse to negotiate, will still negotiate interest rates, trade value, etc.
Next week we’ll discuss my forte’, the service and parts departments.
Thanks for visiting my blog!
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