How do they really make money? Confessions of a service manager

What do they really make the most money from? Do they upsell unnecessary stuff? And why do they charge for that screenwash? Wonder no more...

03 December 2017
QUESTIONS OF CASH

Q: Is a screenwash top-up really necessary?

A: In my book it's not a deliberate attempt to deceive the customer. A service job will have the parts pre-picked so the tech can just bundle into the parts department and grab the bits – this saves time. The kit will include screenwash, which is why it's on the bill. You'll usually find you'll get it into the reservoir even if it's pretty full.


Q: How do you respond when a customer's car gets damaged at the shop?

A: We had a system of checking cars in for damage, so any claim was easier to deal with.

Internally, I'd look at CCTV etc. and speak to any staff members involved. If we damaged it, fair enough, we'd get it repaired. If we didn't, then I’d say “no, sorry sir, I can't cover that.”

It's also a balancing act - if it's a 50/50 with no proof either way, if it's a reasonable customer who is loyal to us, I'll invest £50 in a smart repair to keep their custom and the peace. If they're foolish, I'd take the punt on losing them.


QUESTIONS OF CASH

Q: Now that you're out of the industry, how do you view the rates charged by main dealers? I haven't paid these rates myself, but I'm astonished to hear of people routinely paying in excess of £100 per hour for main dealer labour rates. Compared with other industries, it seems a huge number.

A: I can see both sides of the coin. There are a lot of hidden overheads in a dealership - there's not as much profit in that £100 per hour as you think, but it is getting a bit daft going into three figures, I agree.

SA: The overheads of a main dealer are very expensive. The one I work at charges just over £100 an hour, and before I worked in the industry I thought that was ludicrous. Now I think it's actually about right. I'm a service advisor for a main dealer.

It can be a bit stressful sometimes and isn't really that well paid (circa £20-22k) but I do enjoy it. I don't want to become a service manager though, don't think I'd want that much stress.


Q: Why are so many dealerships these days so fancy, with prices to match?

A: Manufacturer standards dictate what the showroom looks like. I had little control over what is spent and what goes where. All of our techs were factory trained - I've just worked out that the four guys at the dealership I was SM at had a total of sixty odd years with the marque.

SA: I'm in the trade, and agree some of the places are over the top; but the dealers as a general rule have zero input. If a dealer doesn't like the standards or refuses to meet them then the badge is taken down and the manufacturer offers their product elsewhere or will have that particular company's right to their territory removed.

SA: I've recently left the trade after 25 years. London main dealer rates are circa £140 plus VAT. Brand really doesn't matter. The problem these days is that to get the customers in and do the volumes of business needed, you do need glass palaces and space. Space and staff costs money. My dealership in West London costs £30,000 per day to open the doors and, no, that's not a typo.

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