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Are service costs justified?


Guest Harold

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Guest Harold

They really do take you for a ride when you are in the warranty period. They know you won't do anything to jeopardise your warranty such as fitting non genuine parts.

As an aside I also worked for an automotive manufacturer/importer in my younger days and we knowingly sold a particular brand at a $200 loss. After 2 years we had made $400 profit on the parts. That was late 70's and early 80's.

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I had two Nissan vehicle's and I noticed that their own service agreement form mentioned that they may or may not use genuine parts or products. Next service I provided engine air cleaner elements, cabin filter and wiper refills. Saved me heaps and they had no recourse on warranty.

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That all looks very inexpensive, compared with Veyron servicing costs...  Apparently you have to return the car to the Bugatti factory for its yearly service, and if the factory decides something, such as the tyres, needs replacing, so be it.  If you don't agree, the factory refuses to support the car...

 

http://www.autocar.co.uk/car-news/used-car-buying-guides/how-buy-used-bugatti-veyron

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Harold - it's your cash but if it were me I'd be getting the parts ordered in and deliver the car for service with genuine Porsche parts on the front seat ready for install.  If they install them they have to honour the warranty because they are the ones who accept and install them. 

 

Maybe it would only save $200 or so per service... I guess if you have a new 991 $200 is pocket change.  If it were me, I could still see myself doing it just out of sheer distaste for being ripped off blind, and to prove a point.

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I definitely can not afford a Veyron. £100,000 a year to keep it on the road exceeds even my boat cost. Mind boggling.

 

that is an obscene amount of coin to keep a bloody car on the road!  :lol:

 

I had read that every Veyron sold was at a loss to Bugatti (and probably a tax break for Volkswagen AG :ph34r: )... well now we know where they make that up loss..... :rolleyes:  

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  • 3 weeks later...

I get a "free" cappuccino at my Porsche dealership, served by a young girl in a short skirt, long jacket.  Totally makes the huge service bill really worth it... not. 

 

Getting your car serviced at the dealership [to keep warranty or give you that satisfaction that you think your car is really being looked after] is VERY expensive!

 

Here's a few of my most memorable moments:

 

[bMW X5 3.0 SD] $5,000 to replace turbo manifolds - required an engine drop, $60 headlight bulb, $80 for a windscreen wiper blade, a quote for $10,000 for new sunroof because the seals needed replacing [you can't buy seals - discontinued item from 2008! go figure], insurance claim for new computer $15,000 - cause they got wet from water coming through sunroof... 

 

[Porsche Boxster S] quote for $10,000 for new gearbox, 1st gear syncro failed from driving the car "too hard"... 

 

[Porsche 997 S] first service experience - bill for $1,200 after just buying the car and having it with full warranty and being told everything was done....  I did get that Cappuccino though :)

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I get a "free" cappuccino at my Porsche dealership, served by a young girl in a short skirt, long jacket.  Totally makes the huge service bill really worth it... not. 

 

 

That sux -

 

got mine serviced last week and all I got was this to drive for the day

 

IMAG0777a_zpsc9d0484a.jpg

 

 

I don't go to the dealer for big ticket items but for annual service at $700 I think it's ok

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[Porsche Boxster S] quote for $10,000 for new gearbox, 1st gear syncro failed from driving the car "too hard"... 

 

 

Sounds familiar...

$15K to rebuild the 997 gearbox after 2nd gear syncro failed from driving the car "too hard".

Said they'd never seen such a thing. 

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I had two Nissan vehicle's and I noticed that their own service agreement form mentioned that they may or may not use genuine parts or products. Next service I provided engine air cleaner elements, cabin filter and wiper refills. Saved me heaps and they had no recourse on warranty.

 

Nice one, clever noticing that loophole

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Hmmm, how do you drive a car "too hard" in 2nd gear... especially a Porsche...  It's very dumb and really pisses me off.   I remember the Service Manager back then telling me I should have bought a GT3 or Turbo if I was going to drive like that, cause they're the only two cars of which have a gearbox that can handle a few red-lines and they can also tear down those gearboxes and repair them.

 

So I've gone and bought a 997 Carrera - lol :)

 

I even know how to 'heel toe' downshift etc.. match-revs or whatever you want to call it.  Amazing that a 986 [and 997] box can't handle it.

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  • 3 weeks later...

Interesting thread..

 

I've had some surprising dealings with Doncaster BMW with my MINI.

 

When they did the Clutch, they phoned to say the Flywheel needed replacing.  Quoted me OEM $1700 just for the flywheel I gasped.. they then rang me back with a revised OEM quote of $1400.. I gasped.  They then rang me back again and said we'll install an aftermarked FW for $900

 

So thats what I did!

 

Then the car developed it's 'leak' a week later. I took it back as we thought it was clutch fluid. Turned out its power steering fluid. Quoted me 2 prices  $1300 for a new OEM Power Steering Pump and the high pressure line and I got a second quote $900 for a Aftermarket PS Pump and the OEM High pressure line.

 

I took the car for a second opinion, showed the indy mechanic the quotes and they scratched their heads and couldn't believe the OEM quote i had as it was below cost. 

 

Doncaster MINI seem to be giving the Independents a real run with these types of quotes. 

 

And whoever heard of a Dealer installing aftermarket parts? BMW would have a fit would they not?

 

The Indy mechanic flushed out the fluid, tightened up all the PS connections and touch wood - its stopped leaking.

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R53s are way out of warranty so its no risk to the dealers to install aftermarket parts.

It's not the parts prices at the dealers that are the problem. It's the children they put on the job to do the work. I use indies because they are less likely to muck it up.

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Doncaster MINI seem to be giving the Independents a real run with these types of quotes.

From what I understand most dealers are doing under cost servicing, but part of the servicing is built into the original price of the car so if it goes to an indy then they have profited and warranty has been voided.

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From what I understand most dealers are doing under cost servicing, but part of the servicing is built into the original price of the car so if it goes to an indy then they have profited and warranty has been voided.

Mike, that is not the case.

Warranty can not be voided for servicing outside the dealer network. Not with any marque.

I forget what the exact wording is, but independents are allowed to work on cars under warranty, and need to be using "acceptable" quality parts, which is one of the reasons why we use OEM filters, clutches, brakes etc.

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  • 1 month later...

I spent years in and around the car dealership game.  The average Australian car dealership makes ~2% net profit on sales . . . a very, very thin profit margin.  As someone else commented, most dealers lose money on new car sales, and many lose money on used car sales too.  They make a small amount of profit on their on service and parts. 

 

So, where do they make the money?  F&I (finance and insurance) and aftermarket accessories (tint, chemicals, etc).  That's where they make almost all the profit-- ie, maybe 80% of total profit at a typical dealer.

 

That's the sad part about the industry.  Despite the crazy service fees we pay, most dealerships are so badly managed that they still make only a small profit on service!

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I just found this in a Deloitte report.  Only thing I think it understates is how important aftermarket accessories are in dealerships.  If sold effectively a dealer will get these added on to around a third of cars sold at a profit of $500-700/car.  That's a BIG profit contributor.

 

The Deloitte report is a bit out of date (2013) but makes the point:

 

To start, the average dealer in 2013 lost money selling new cars. In fact, if we think of a hypothetical dealership which made a total net profit of $100 for the year, the new car department would have “contributed” a loss of -$75 towards that total!

The used car department of the average dealer was only slight better, losing -$11 for our hypothetical Dealer Principal, while the Parts department would have generated a grand total of $19 in net profit, and the Service Department just short of $30 net profit.

Across these four core departments, therefore, our hypothetical dealer actually lost around -$40.

So how did this hypothetical dealership move from a loss of -$40 to a total net profit of $100?

Essentially, through Finance & Insurance, with a little bit of miscellaneous “Other Income”. In fact, the average dealer has become so dependent on F&I that it now contributes 140% of their net profit!

This creates an immediate and urgent challenge for the average dealer: if new car gross profit continues to decline because of the competitive market, where will they make up the difference now?

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I would doubt those figures are accurate for most Aussie (edit: non prestige) dealerships, and the US market works completely differently to ours, with most cars being bought soley on payments/finance, rather than price(making FnI a much bigger profit centre, and margin in other areas less important), but thats irrelevant IMO, as when talking a Porsche dealership in Australia, then all bets are off as to profits centres within the business. I would put money on all departments contributing profit but would that really surprise anyone ? If anything they could probably lose some money providing service, as a cost of doing business and still be a highy viable business, although as stated I am doubtful this is the case.

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I'd believe the figures.  The interest payments on a car far exceed the margin for everything else.

 

Even though Porsche and MB and BMW have been robbing Australians blind for years, it's the head office that does it, invoicing the cars expensively to the dealer.  The dealer doesn't benefit other than collecting bigger commissions on bigger finance packages.

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