It was probably a big mistake but I recently bought a new enough vehicle that now I am being courted by a Chevy Dealer to bring my 2020 Tahoe in for service.
Now this isn’t going to happen since their parts department was not interested in helping me with my 89 Caprice and told me if they had parts that old they would just throw them in the dumpster as if my money wasn’t green.
I am curious though, does the manufacturer really care if you bring your vehicle in for repair?
Do they get a cut of the money, or do they just really hope something newer and shiner will catch your eye while you are having repairs made to your vehicle.
Or more likely when you have a catastrophic failure on a major component on a late model vehicle which is extremely common on today’s new vehicles that you will throw in the towel when presented with a staggering cost of repair and just double down and buy a new vehicle?
I personally think Chevy only cares about selling new vehicles. Yes if they can make a buck or two off of service so be it, but I don’t believe it really effects their pocketbook. They want to sell new! New and shiny and better! and most importantly MORE PROFITABLE THAN VEHICLES HAVE EVER BEEN!
Are you meaning the Dealerships, because the manufacture does not work on vehicles, they manufacture them…And they have to pay the dealership for the warranty work done…
From what I understand from the couple times I worked at a dealership (not manufacture) as well as talking to a couple of brothers that formerly owned and ran a Mazda dealership that I worked for and new pretty well, but this was many year ago, the new vehicle sales side doesn’t make as much money as you think they do, it is the Service side that financially supports the dealership…
Nevada will be more up to date on this matter I am sure…
Exactly wrong. And, like @davesmopar said, it’s my understanding that the service side makes a lot of money for the dealer, along with financing and the stuff sold at closing. The actual new car sales? Not so much.
A new car dealer is not a restoration parts store, they need inventory turnover to support their high fixed costs. Something like Rock Auto would be my parts source for an ‘89 domestic.
A kid I went to high school with was inherited a group of dealerships his father and grand-father built over 50+ years. The service side is the MOST profitable side of the business.
Yes, but we need to add that the manufacturer doesn’t profit from a dealer’s service department… except of course from selling parts to the dealership, at a discount.
GM’s is pretty similar… around 5% average. Pretty pathetic ROI.
Dealerships can do better or worse depending. An article here is pretty enlightening..
Inventory control is a BIG opportunity for profit. Which means @Old-Days-Rick ‘s 89 Chevy parts are money earning nothing but costing space and inventory control to maintain for cars that barely still exist.
Back in the day when dealerships were old school, many had a stock of parts for older vehicles. I just inquired if they happened to have any old NOS parts for Caprices or other old cars by chance. Instead of just saying no they decided to take a tone with me.
They have the right to do that and I have the right to not return!
I understand this, however it didn’t hurt to see if they had old NOS parts laying around such as an old bezel or such. All they had to do was say no and not insult!
Just for asking, “Good morning. Was wondering if you had a ‘hooby-gugler’(for sake of discussion) in stock for a Chevy ‘89?”
Instead of going out, as suggested, and burning donuts in their parking lot, I would have gone and politely asked to relate my experiences in the parts dept to a dealership principal (General Mgr, President, Director, whatever title they hold). You never know when you may someday need that dealer’s assistance again, so you don’t want to (literally) burn bridges.
Manufacturers rely on dealers to sell their cars and to offer service, especially warranty service. Dealerships pay fees to the manufacturer like a franchise would. Manufacturers reimburse dealerships for warranty repairs.
Manufacturers would prefer you patronize their dealerships for service. It supports their network and likely feel you will have a better service experience using their authorized service centers.
You may not realize this but any company has to pay taxes on inventory in their possession every quarter. If you keep that inventory long enough without selling it, it would be a loss for them to sell it to you. Most businesses will purge inventory of E&O (excess and obsolete) on a regular basis. It is cheaper to throw it away than to keep it on the shelf hoping someone will come by a decade later to buy it.
That’s right. They make no money off your service bill. That is the dealership and service is where they make their bread and butter. They like to sell new vehicles because most people finance and that is where the sales group can make a healthy margin. That and all the add ons they bundle into your monthly payment…
It was just weeks before C O V I D hit. I was so excited to be trading in my paid off 2015 Elantra to get into my present Accord, that I let the second sales person talk me into purchasing two add-on packages (each worth at least $3,000 at that time): Bumper-to-bumper inclusive warranty, and lifetime oil changes.
My trade - the Elantra, was at the time worth only $2,000 less than the 71,000 mile Accord EX($7,900) I was getting into. My payments would have been a pittance! But both my primary sales rep, and the second one I sat down with, stated “the bank won’t finance this small amount”, and cajoled me into those aforementioned add-ons.
The resultant monthly payments(including the interest fattened up by the add-on packages) ended up with that Accord costing me low teens, the equivalent of giving that dealer the Hyundai!
Lesson learned: Ask for the finance numbers, don’t just fall for what they tell you about what “the bank won’t do”.
Or better yet, if you’re buying a low-mileage, good condition ten year old car like I did, and you have a trade-in value in hand, try to pay the rest in cash, if you can, and get outta there!
Often, the best education comes from being burned at some point in life. These people are trained experts at convincing people and separating them from their money. In addition to your advice I will add- never get emotionally attached. That will cause anyone to make bad financial decisions…
