Has anyone noticed that dealerships are expanding their marketing campaigns to draw the retail customer into the dealership for service? Check out the advertising: Ford (America's Newest Tire Store) and GM (Good Wrench Service Plus); these are but the tip of the iceberg. Dealers are offering longer nationwide warranties, certified technicians, and original equipment parts at competitive prices. Why is this happening? For a number of reasons.
New car profits are at such a historic low that the service departments must step up to the plate and become profitable for the dealership to survive. Another reason is warranty work; at one time it represented 70% of the service done at dealerships. Today that figure has fallen to about 20% - cars are made better and last longer! And, finally, dealerships are offering better service in an effort to capture the customer's car purchases.
Let's take a look at some of the advantages dealership service departments have to offer. First, in order to maintain their franchises dealerships must pay for training their technicians and providing special tools and equipment. Dealers also have access to proprietary information, information on new vehicles they sell and service. This means that no one else can access this information, which is often necessary for diagnosis and repair. In addition, dealership service departments work mainly on the makes and models that they sell. Since they are very familiar with the particular car line, they can usually pinpoint a problem more quickly and more accurately.
Dealership technicians are usually paid according to a method called flat rate. When a job is dispatched to a technician, the clock starts. If an operation calls for a time frame of two hours, then the labor will be twice the shop's hourly rate. If the technician is proficient at this particular operation and can do it in half the time, the customer still pays for two hours of labor and the tech earns two hours of pay for one hour of work. Conversely, if the tech does the job in more than the allowed time, the customer still pays two hours of labor. This method of payment holds a standard hourly rate for the customer, and yet rewards highly skilled technicians.
A drawback to this method is that technicians may find themselves hurrying to make a quota. In addition, the technicians may be reluctant to work on vehicles other than the car line they usually service because they are not as familiar with these cars and, consequently, the job will probably take longer. With these considerations, there is the possibility of cutting corners to get the work done faster, or a lack of expertise if the tech is working on a vehicle that he has little experience with. These potential problems are averted in a reputable service department by a good service manager whose goal is to serve the customer and develop a long term relationship with him or her.
Traditionally, a dealership's hourly rates were higher than the independent shops because of overhead, cost of tools and training. That trend is changing. Why? Because independents are incurring costs associated with the rapid technological changes taking place, the need for ongoing training and the purchase of new equipment and tools.
(use our Repair Estimator to find out how much any repair should cost you)
Now, let's take a look at the independent shop. Independent repair facilities have always been there to serve the neighborhood. In the past, many dealerships viewed the customer as a potential car sale; the focus was not on customer service. Consequently, the customer was driven (no pun intended) from the dealership to the independent facility, where one could enjoy a cup of coffee along with a sincere conversation about the customer's family as well as his car (we've coined a name for it now ... Personal Service!). In addition to a personal relationship, the independent offers a variety of services on diverse makes and models of vehicles. Today, top quality independent repair facilities also offer nationwide warranties through the parts suppliers and the associations they deal with. When comparing them with dealerships the scales are balancing in this area!
As for the hourly rate for work, as I mentioned earlier, independents have been able to offer better prices. However, this consideration is changing because of factors discussed below.
What about the cost of repair? Independents also typically charge a flat rate for their services. They use the same book as the dealerships to determine the time a job should take, and they charge the customer accordingly. The difference is that the technician is usually paid an hourly rate (based on his actual performance) or a salary. There is no incentive to hurry through a job or compete with other techs for the easier job. Also, seasoned techs who have worked in independent facilities have a wealth of experience and knowledge from years of working on a variety of vehicles. They are an excellent resource for difficult car repairs.
Because of the rapid changes in automotive technology, it is vital that the independent facility you associate with is qualified to work on your car. They must be up to speed on the latest tech, methods, training, and equipment. The trend in the past ten years has been for the independents (the ones who are serious and in it for the long haul) to upgrade their facilities and equipment, as well as train their technicians, because automotive technology is escalating at rocket speed! Here are some 'shingles' to watch for:
- ASE Certification – Automotive Service Excellence
- NAPA Autocare
- ICAR – Inter-Industry Conference on Auto Collision Repair
- Better Business Bureau
- Parts Plus Car Care
- PPG Certification
Have your own questions? Ask them at www.autoblog.com/car-questions.
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