For Consumer Information.
Story:
My father was a marine in World War II, and he had a reputation for scrupulous honesty. I learned from him that you had to level with people. Later on, that got me into trouble in the service business…. That didn’t go over too well in the dealerships.
I grew up working in the service department of a Chevrolet dealership in a small town in the Pacific Northwest. My father and uncle started the franchise about the time I was born. As a kid I was always down there washing cars or pricing parts. At that time, GM probably made the best product in the world.
After I got out of college, I moved to California and got a job as a service writer at a domestic dealership in a wealthy area. Later, I went to work at a specialty car company that was building high-end cars, and I was their national service manager for years.
What I learned over the years always put me at odds with my bosses. They wanted me to sell more, to recommend service that wasn’t needed and to overcharge for the work being done. Ultimately, I concluded that the fundamental incentives built into the system were dishonest. I couldn’t do it anymore so I got out of the business.
So here are a few things I learned that will save you a whole lot of money.
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.
When You Arrive at the Dealership
At the dealership, customers pull up in the driveway and are greeted by the service advisors. As the customers line up, you develop a sixth sense of who needs what, and thus which customer you should go to, to make the most money. Of course, you have the returning customers who you’re familiar with, and you have to help them. But then you find yourself looking for the people who have old-looking cars and who also look rich, so you figure they can afford superfluous work.
The way we were taught to handle customers is via a carefully controlled interaction. The company even produces videos detailing exactly what they’re supposed to do and say and sell.
There are phrases you find yourself using to sell services. For example, you can get people to go for early fluid changes by saying, “While you’re here, let’s get this work taken care of,” because people hate the hassle of coming to the dealership and waiting around. We also play up the safety issue. If you want someone to agree to a brake job, just say, “There’s less than 50 percent of your brake pads left.” That sounds bad but actually it isn’t time to get a brake job until that number is much closer to 15.
Pricing Work for Profit
Service jobs are priced according to the “flat rate” book, which has the times it takes to perform each repair or service procedure. For instance, an oil change takes 0.3 hour according to this book. The mechanics, however, try to beat these times to make more money for doing less work. Unfortunately, that incentivizes speed and overselling, which to me is the built-in problem with most service departments.
http://www.edmunds.com/ownership/maintenance/articles/152366/article.html
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