Has anyone noticed that dealerships are expanding their marketing campaigns to draw the retail customer into the dealership for service? Check out the advertising lately – Ford (America’s Newest Tire Store) and GM (Good Wrench Service Plus). Dealers are offering longer nationwide warranties, certified technicians, and original equipment parts at competitive prices. Why is this happening? For a number of reasons. The new car profits are at such a low that the service departments must step up to the plate and become profitable for the dealership to survive. Another reason, warranty work use to represent 70% of the service done at dealerships. Today that figure has fallen to about 20% because cars are made better and last longer.
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 2X 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.
Who Is the Service Advisor? People think of the service advisor (also called a service writer) as a mechanic but basically they are salesmen. They’re even paid on commission. That means that the more work they convince you that your car needs, the more money that puts in their pockets.
Another problem is almost no one reads their owner’s manual so they really don’t know what’s best for their car. See, the manual was written by the company that built your car. It is the most accurate description of how to care for it. But when people go to the dealership for routine maintenance, the service advisor pushes the “dealer recommended service” on them. Basically, this calls for oil changes and transmission flushes more frequently than the owner’s manual.
For instance, the dealer might recommend changing the transmission fluid every 12,000 miles, whereas the manual recommends changing it every 60,000 miles. If you followed the dealer’s recommendation, that means you’d have four transmission fluid changes that were unnecessary. And transmission fluid changes aren’t cheap — they can run $200, so you might be spending as much as $800 unnecessarily.
The Dangers of “Upselling” Let’s say that someone comes into the dealership for a simple oil change. They immediately become a target for the service department to “upsell” them as much additional work as possible. First of all, the advisor will ask how many miles are on the car. If there is close to, for example, 20,000 miles, they will say, “Well, you’re just about ready for your 20,000-mile service. Here’s what we recommend.” They then whip out a sheet with a laundry list of services that are offered for a package price. But if you look at what is actually done to the car, it is just inspections or fluid checks and fills.
When you start getting more miles, the service writer will say, “We’re going to do all services recommended for that mileage, but we’ll also check for other problems.” So you agree to a “full inspection,” which is one of the biggest scams. Later in the day the service writer will call and say, “Everything looks OK but we recommend you have some other work done: transmission fluid, air-conditioning, differential fluid.” By the way, most manufacturers don’t recommend ever changing the diff fluid. So you go in for an oil change and end up dropping $600.
Dealerships don’t profit on extensive operations like replacing engine blocks, transmissions or other large components. These require expensive parts, and the mechanics take longer to finish them. So while you pay a lot for these operations, the service department doesn’t make much off them. With the smaller operations, on the other hand, you don’t pay as much, but they’re making a very high percentage of profit.
Brake Jobs and Other Scams: Service departments are always trying to get you to agree to a brake job you don’t necessarily need. And then they recommend that you “turn the rotors.” This means putting the rotor (the disc part of the brakes) on a lathe and cutting a thin layer of metal off to make the surface flat. They charge you $50 each to turn the rotors, and it only costs them 50 cents and the startup cost of buying a lathe.
It isn’t even necessarily safer to turn the rotors — in fact, it’s actually making them closer to wearing out, since cutting the rotors makes them thinner. This way they could warp more easily. My opinion is that unless a rotor is severely gouged, don’t bother turning it, as you have little if anything to gain. Let the pad adapt to the grooves in the rotor. Rotor turning is one of the big scams out there.
Most brake pads come with small metal strips buried under the brake pad called the “wear indicator.” When the brake pad wears down to about 15 percent of its thickness, the metal contacts the rotor and causes the brakes to screech when you hit them. Then it’s a good time to change them. Sometimes mechanics will bend these strips so they start squeaking sooner. Another thing they do is spray oil on the shock absorber so it looks like there’s a leak in the hydraulic fluid and you need your shocks changed.
Service departments take advantage of the fact that there’s not as much mistrust of them as there is of car salesmen. They play the role of “I’m on your side,” the friendly mechanic. Often they have some mechanical experience but actually, their strong suit is that they have good public relations skills. Their job is to be the counselor to the customer, to tell them what they need and don’t need.