Serious Question, Why do dealers charge so much for service?

[Subarunation 713]

I am not trying to start an "I hate the dealer because of blah, blah, blah" thread. I seriously wonder what it is that drives dealer service prices so high. Do we have anybody that currently works at a dealer (any dealer, just not Subaru) or has worked for one?

 

Is overhead at a dealership really that high? I was in for the air mass meter recall on my 99 Legacy sedan. I was being sold HARD and by that I mean everything short of guns :-) by the service writer, service manager and the mechanic to get my timing belt changed and front main seal changed (in fairness they do need it and I will replace them along with cam seals, oil pump and water pump in April) But $603 to do a timing belt and front main seal. That allows them $100 for parts and $500 for labor.

 

Rather than scream RIP OFF, ROBBERS or THIEF I thought I would ask what really makes the prices so high. What are the costs? Why more at a dealeship than at a "boutique" independent shop?

 

I am anxious to hear from you dealer people,

Greg

[unverviking]

I'm not a "car mechanic", I'm a telephone technician, not the guys that climb poles, but a technician that works on Commercial Phone Systems (PBX's), so I go into businesses and install new systems or move existing phones, etc.

 

I work for 1 of the largest phone companies, and I know that they are charging about $85 bucks an hour for me to be there with a 2 hour minimum for "MAC" work. Here's the reason from my perspective...

 

I have to do training every year to stay "certified" on several product sets. All that costs the company some money. A week long class averages $3000, plus a hotel room (~$600) plus $50-$75 a day allowance for food, plus air fare.

 

Now I imagine that a dealer has to pay those kind of bucks to have their "certified" technicians, and they, like me, need to stay up with the current changes on all the cars, etc...

 

So, in essence, I guess what I am trying to say is that if we go to the dealer to have these "certified" technicians work on our cars, we have to pay the money to do it (Labor Rates). Rather than have any corner garage technician work on it, who may not know the car as well as the "certified" technician does. (should)

 

Now their "sales" tactics, don't get me started...

[NorthWet]

So, what *was* their Shop Rate? If you don't know, then find out before you get too upset. It is probably in the $90-100/hr range, about par for any tech service industry. Also what was the time required to do the job? Flat-Rate book might say 5+ hours to do the work... and it might if you do a meticukous job, or take into account that the belt-cover inserts might spin, etc.

 

Yes, it is expensive, which is one reason that I try to do my own work.

 

The heavy sales tactic might be a "CYA": If they let you leave without doing their darndest to get PM done, and your belts failed, a jury might find them liable because they didn't impress upon you the importance of the PM. This way, you have told all of your friends and families, and SOMEONE is likely to tell a jury that you were warned.

 

Or they could be money-grubbing jerks.

[Subarunation 713]

(snip)Now I imagine that a dealer has to pay those kind of bucks to have their "certified" technicians, and they, like me, need to stay up with the current changes on all the cars, etc...

 

So, in essence, I guess what I am trying to say is that if we go to the dealer to have these "certified" technicians work on our cars, we have to pay the money to do it (Labor Rates). (snip)...

But so do the techs at my local Bosch shop. They have as many if not more certificates on the wall as the dealer. But in fairness we can list one item as to why they cost more:

 

1-Factory Training of Technicians

[Subarunation 713]

So, what *was* their Shop Rate? If you don't know, then find out before you get too upset. It is probably in the $90-100/hr range, about par for any tech service industry. Also what was the time required to do the job? Flat-Rate book might say 5+ hours to do the work... and it might if you do a meticukous job, or take into account that the belt-cover inserts might spin, etc.

 

Yes, it is expensive, which is one reason that I try to do my own work.

 

The heavy sales tactic might be a "CYA": If they let you leave without doing their darndest to get PM done, and your belts failed, a jury might find them liable because they didn't impress upon you the importance of the PM. This way, you have told all of your friends and families, and SOMEONE is likely to tell a jury that you were warned.

 

Or they could be money-grubbing jerks.

First of all, I am not upset, I am *REALLY* curious. I don't know what their shop rate is, it matters not, it is the cost of the job vs the cost of the job at a highly skilled Bosch garage.

 

I too try to do most of my own work. If it is something above my skill level I will pay well to have it done. I do most of my own repairs for 2 reasons, first, I am CHEAP, second I am PICKY. Paying good money to have somebody else do my repair work falls right in line with my cheap side. How? I know it is done perfect and the overall value is cheap, the cheapest price can be expensive.

 

As far as the legal mumbo jumbo, I don't know of any timing belt issue that made it to a jury trial as that would be small claims court in Indiana and Michigan where I get service. But never underestimate a hungry and broke lawyer :-)

 

Where are our dealer people?

Greg

[idosubaru]

demand is high because people want new cars and they have a desire to have them dealer maintained. the short answer is dealers can charge this because people will pay it.

 

but really you're asking the wrong question....if you're surprised the real question is why are people paying these prices? if i started a car shop charging 12,345 dollars per hour and stayed in business you woud ask why people are paying that. if i went out of business you'd say i'm a dumb rump roast for charging that high. well dealers arent' going out of business so the question remains, "why are people paying this much?" general public is unskilled and does not know much about cars (or anything else in my oppinion). general population is not capable of doing anything to their car or even know much about it. the american population is being highly swayed towards non technical fields and that mindset of fixing anything yourself. universities in the US graduated 1/6 as many engineers (technical fields are showing this general trend) than china but 3 times as many lawyers last year. lawyers don't work on cars. technically minded people do. quick fix is the american way, why bother being resourceful or learning something when money gets them what they want? they just went in debt 30,000 for a car that's worth 25,000 when they sign the papers, why quibble over small change maintenance fees? i don't know about your area but my area is overrun with new cars. i'm hard pressed to even find anything from the 90's. very interesting phenomenon to me, as growing up in the 80's there were lots of older cars. it's amazing how many new cars there are these days, 20 years ago that was not the case. the economy is much better now and people are leveraging their affluence for driving nicer cars. (possibly a local trend). the desire for new cars is an ever expanding one that is spreading as much as advertising will allow it. with all these new cars, there are people willing to pay for dealer services.

[Seahag1978]

Liability. For "re-fixing" your car in case of a screw-up that they need to correct. Read the posts on this board about cars that were improperly repaired at dealerships, that resulted in more damage that it went in with! I hate to say it, but the majority of the "mechanics" that work at dealerships are just parts-changers. Period. "Training/certification costs" is present in a utopian world only. I woud LOVE to pay the prices charged for a properly trained "mechanic" that has insight beyond a computer output.

[legacy91]

I'm a porter at a local subaru/ford dealer and I've looked into this problem and never quite gotten an answer. Two things that I have found though: they charge a ridiculous amount for "shop supplies" and "waste disposal." The disposal is sually nothing more than throwing away the latex gloves they wore, and the shop supplies is to pay for their hugely expensive tool sets. I've been cursed at before for nothing more than looking for a screwdriver. Those techs are real anal about theire pricey tools. Hope this helps.

[Seahag1978]

I'm a porter at a local subaru/ford dealer and I've looked into this problem and never quite gotten an answer. Two things that I have found though: they charge a ridiculous amount for "shop supplies" and "waste disposal." The disposal is sually nothing more than throwing away the latex gloves they wore, and the shop supplies is to pay for their hugely expensive tool sets. I've been cursed at before for nothing more than looking for a screwdriver. Those techs are real anal about theire pricey tools. Hope this helps.

 

 

Do the techs supply their own tools to work there? Might as well take a bone from a pitbull than a tech's personal tools. I see the disposal issue... but have to giggle about the supplies thing... our boat dealer charges by the "pound" for rags when our boat is serviced?! That's just silly, how many "pounds" of rags can you use on a job?!

[legacy91]

I think the dealer pays for the tool set and has them delivered and all, but they're still extremely protective of their equipment.

[shimonmor]

I'm a diesel mech and electrician and work on yachts...our shop rate is $85/hr and I can see why. There is a lot of overhead. The mechanics get their hourly wages which are billed out. The managers and parts people and everyone else's hours are not billed out but they have to be paid. Utilities, advertising, supplies, bookeeping have to be paid. Medical insurance. Training. Hotels and per diem and travel to go to training. Business cards, hats, uniforms, service manuals, photocopy machine, and on and on and on. And then there is the warranty work. Tools are usually always paid for and owned by the mechanics themselves (except for specialty and really expensive tools)...so those don't count (I never let a customer borrow or touch my tools). All in all, there are a lot of bills to pay. I think most shops make their money on the parts mark up and all the labor costs usually go to cover expenses. Generally speaking. I've always thought of going into business for myself...there is a lot of demand and I would be sure to make more money...but who needs the hassle?

[unverviking]

But so do the techs at my local Bosch shop. They have as many if not more certificates on the wall as the dealer. But in fairness we can list one item as to why they cost more:

 

1-Factory Training of Technicians

 

Correct, what I should have put was "Subaru Certified" Technician.

 

There are a lot of certifications out there, but only dealers can claim "Subaru Certified" (I think) or can an indie shop send a tech to a "Subaru" class to get certified ???

[tomson1355]

I would add to shimonmor's excellent list of reasons the following: Taxes- Fica, Medicare, Unemployment, Workman's Compensation. These things are huge and must not only be paid, but also be administered, meaning someone has to be paid to get it all done. I sometimes wonder why anyone would go into business at all, given the crap that has to be dealt with.

 

 

Tom

[svxpert]

<<There are a lot of certifications out there, but only dealers can claim "Subaru Certified" (I think) or can an indie shop send a tech to a "Subaru" class to get certified ???>>

 

no, only a dealer or SOA employee can go to a class.

[Subarunation 713]

<<There are a lot of certifications out there, but only dealers can claim "Subaru Certified" (I think) or can an indie shop send a tech to a "Subaru" class to get certified ???>>

 

no, only a dealer or SOA employee can go to a class.

The Bosch garage, Classic Imports in New Buffalo, MI, has certificates from Subaru factory training.

 

In my original post I didn't care what dealer Subaru or Ford they both are expensive.

 

Thanks for the good input, some good points were brought up. When I think of the two garages we go to when the job is to complex for me 1 is Dave. Just Dave, no service writer, no parts manager, no service manager, no clerks, no 26,742 square mile parking lot to plow, just Dave oh yeah and REALLY cheap. 2 is Classic Imports, Owner who still turns a wrench, his wife to do the books, a service manager/writer and the rest are techs who are generating income.

 

When I think of my visit to Team Suzuki-Nissan-Subaru in South Bend on Friday there were 5 people behind the counter, FIVE! and all were overhead (oh yeah and 2 techs wandering around). I hope they were staffed for the early morning, lunch and late afternoon rush times but at 2:30PM, dead time.

 

Does a dealer get reimbursed for warranty work at normal shop rate or is the repair/recall a flat rate?

[Johngenx]

Well, neither of our subies spends much time at the dealer. I have found that Subaru dealer service is horrendously expensive, and I was shocked at the cost of service. I will never again gripe about my Mercedes dealer and MB service prices after spending time at the Subie dealer.

 

If I took a 100,000km span for both my Mercedes and for either the OBW or the Forester, the Subie would be at least 2X the cost for service than the Mercedes.

 

Parts prices for the Subarus are the same, maybe a bit higher for maintenance parts, and much higher on a few items. However, the killer is the labour allowances for the various jobs.

 

Then, despite the higher costs, they have no luxury services. No loaner cars, no included detailing, a crappy waiting area with one lousy chair, no free coffee or other drinks, and so on. For the price they charge, I would expect some serious pampering.

 

I love the cars, but the dealers (here, anyway) suck.

[rcousins]

One thing not discussed is dishonesty. Many years ago my son was a mechanic at an auto dealer (not Subaru) and was pressured to do repairs that were not really needed. He finally quit and went to work for an honest independant shop.

 

I am anxious to hear from you dealer people,

Greg

[simpreza2]

I know techs at dealerships work off flat rate and the dealership charges you the book rate (lets say 4 hours) even if the tech only took 2.5 hours to fix your car. So they are getting "free" money. I know the shops I go to dont use the flat rate. They charge and get paid for the hours they actually work on your car. I dont know if its like that everywhere but thats how its like by me.

[Seahag1978]

One thing not discussed is dishonesty. Many years ago my son was a mechanic at an auto dealer (not Subaru) and was pressured to do repairs that were not really needed. He finally quit and went to work for an honest independant shop.

 

I am anxious to hear from you dealer people,

Greg

 

 

I know someone who had the same experience... he was told sell repairs not needed. He couldn't live with that. He quit and started a lawnmowing business... he's a much happier man... and richer too!

[Sydfloyd44]

In the auto glass world, we get a FLAT $45.00 for any type of auto glass installation regardless of whether it takes us 10 minutes or 4 hours! That is CASH OR INSURANCE! If the book (nags) says it needs a molding, we make anywhere from $5 to $25. The adhesives, usually 10.00 for the job. Molding, cowl or door panel clips we use, ZERO, NOTHING!! Disposal fees or any other type of "fee", NOTHING!! All of our profit is made on the glass. The cheaper we can buy it, the more profit we can make. (with slight variation, this is true of ALL auto glass companies, nationwide!)

Our company is in its 25th year. We buy our glass at about as good of a price as it can be bought. With such small margins, we are doing just fine, just the same as the dealer would still make money.

Keep this in mind the next time anyone thinks $200 is "expensive" for a new windshield professionally installed.

Dealers charge what they do BECAUSE THEY CAN!!!!! If you want "Factory Certified Technicians", this is the price. They follow book hours. If a light buld needs replaced and it is a matter of simply spinning it out and plugging the new one in and the book says .5 hours, the will get paid 1/2 of their labor hour rate which will typically be at least $40.00. (i'm exaggerating, but you get the picture.)

If any of you have been in an accident and had your car fixed at the dealer, and paid for by your insurance co., look at your bill. Their $80.00 labor rate was probably chopped down to about $45.00 and parts are typically heavily discounted. Do you think they lost money doing it? Of course not.

[ballitch]

one of my buddies is going to honda tech school, really talented guy, he has to buy about 12k in tools for the tech training, and know how to use them, he is getting them from snap-on no less, he is getting a discount cuz the dealership he works at has the snap-on guys come in every once and a while, and he got to be tight with them, but for the most part, certified techs own their own tools, and they are not cheap, or easily broken. but paying for stealership prices is insane, it is true, 20 years ago, you had a couple of choices, mecahnic, welder, const. worker, or some other kind of manual labor type career, now, it is just the opposite, the dealership is a business, and any business stays in business because of stupid people that are too ignorant or dont care enough to know anything about the car that gets them around, so they pay what the dealership charges, with not much discontent, with us however, we're a different breed, a half-breed, if you will, a combo of the two, and we, well say ****-you to dealerships.

 

 

 

 

 

~Josh~

[Scottbaru]

Bridgman? There are no dealers around me, I'm planning to stop at a dealer in your area to get keys made, next time I go to O'Hare. Maybe I'd better drive a little farther?

[jayhawkroy]

I have owned two Subarus, and my dealer has never seen the car after warranty. All of my services are done by an independent import mechanic that I trust. In general, Subaru parts are used, because he found that non-Subaru parts cost as much as Subaru parts, so we defaulted to the OEM parts. Last time I checked, his labor rate was about $10-15 per hour cheaper than the dealership and is more convenient to me. Ask around and find a good independent mechanic who is familiar with Subarus and you may find your overall costs to go down. As for timing belt replacement, I would go by the owner's manual and what it says. I have noticed that several dealers, not all Subaru, think you should change your timing belt more often than what the owner's manual calls for.

[richierich]

I think the dealer pays for the tool set and has them delivered and all, but they're still extremely protective of their equipment.

 

MECHANICS PAY FOR THEIR OWN TOOLS!!!! And they get sick and tired of salesmen and porters and lube boys "borrowing" there $25 Snapon Screw Drivers only to have the person misplace it. So so sorry if they yell at you for taking their stuff, but someone else has screwed it up for you in the past.

 

ONLY tools the dealership supplies is large equipment, and Subaru speciality tools that they are required to buy from SOA.

 

In addition shop supplies and disposal fees go to stuff like getting rid of oil, antifreeze, shop towels and rags, uniforms, maintaining shop equipment, to say a thing like "latex gloves" you really are considering what it takes to run a big company and maintain the shop area so it is safe for you.

 

The main question was "Why do they charge $80 an hour. The mechanic gets usually $17-25 depending on years of experience and location, the rest goes to the dealership for running the service department. Insurance and taxes are a big fact in it, in addition overhead for service writers, overhead on the shop, heating. I am not saying it is not expensive and overpriced, but it does cost then some money.

 

But that is why there is a place for good independent shops. But even my prices are not cheap because of overhead. For example you pay by VISA ( I get charge 1.68% of the bill)

 

In addition most of the mechanics at the dealership are good, all anyone ever talks about is bad situations at the dealership, if you someone had a good service then they complain about the price. It is a no win situation for the dealership.

[ron917]

I found out a while back that service writers and techs at some shops (dealer and indie) get comission! It's no wonder you get a hard sell for extras at those places.