So you think the dealer is too expensive?

[SteveTheTech]

I see it all the time here on the forums, people constantly complaining about the price of things. I was doing a little light reading this morning and came across this quick piece on Yahoo, that put a little perspective on it.

http://finance.yahoo.com/famil...poffs

The markup at many dealers is to keep the lights on, rent payed and hourly staffers here. If you can find a deal that more power too you but the majority of us are not out to screw people over we are just trying to stay in business.

For those of you who work for a place that produces goods I am positive you too have a markup. I am sure we have some salesmen here... to them the margin is god. I know these cars started out expensive and there is a certain luxury mindset attached to that and as such the prices change slightly. Infiniti differs from the German manufacturers in that they split their regular and nicer models.

I am not one to advocate spending with reckless abandon but consumer education is key to ensuring you get the most out of every dollar.

[GJEMD]

I missed something in your justification of dealer cost. The point is I took my 2004 M45 in for warranty work on an airbag and ask for a quote to resurface the rear rotors and replace the rear pads. rear only $350 .... I don't care what your light bill is NO THANKS

[SteveTheTech]

It was comparative, this is something I see on a daily basis not something that I only think about once and a while or when the one of the lights on and something might be covered under warranty.

All dealers across the board will charge more but should be offering a level of service that meets the industry standard. The people that buy used cars and only take them into the dealer for free things are not really the type of customers they are seeking to retain. Think about it from a business sense where is the profitability? Infiniti is a for profit company but in comparison to the competition they will typically exceed the competitions level of service

Just my 0.02

[Q45tech]

If they could Dealers would not even bother to have a service facility, since most breakeven at best. They would just keep a few bays to perform new car prep.Today the Used Car and Parts Dept are the only profit centers.

[qship96]

If they could Dealers would not even bother to have a service facility, since most breakeven at best. They would just keep a few bays to perform new car prep.Today the Used Car and Parts Dept are the only profit centers.

Yes, but the parts department is only profitable because they supply the parts to the service department..........close the service department and the parts department becomes unprofitable. Catch 22

I do not think the Infiniti dealer service department is too expensive,as you are getting factory trained professionals who know your car inside/out.
Modified by qship96 at 11:10 AM 2/4/2010

[Q45tech]

Before the Inet, when people didn't understand the actual dealer costs, the average selling price of new cars was higher. Same with fewer outlets, as ATL has 5 Infiniti Dealers in Metro.

In the past, New cars supplied more of overhead, now service labor [per hour] must bear more.

[2007 M45 Sportster]

Shop rate $115/hr

Item ------- Dealer Price --------- Market PriceCabin Filter ------ $108 ---------- $22 + Shipping (Online)Break Fluid ------ $24/qt ------- $6.99/qt (Pep boys)Air Filter ------ $77 ------ $29 (Online)

Steve, generally speaking I have agreed with much of what you post out here on Nicoclub. However, on this one, I disagree. Now, I am a guy with a business. I have a clear understanding of markup, margin and a need to make a profit. I also understand overhead, payroll and the cost of inventory, in other words, I am clear on what it takes to run a business.

That said, I am also clear on what gauging is. $108 & $60 to provide & install it is simply an outrage (Period) Let me spell that out for you. $168 for a 10 minute job and a $30 part, RIDICULOUS.

In defense of the dealer, I am also clear that they perform other services and it is always a good thing to have a skilled technician put his hands on the car from time to time. But that is why we pay the shop rate. I am also aware of the psychology that we all fall into having major repairs done & paid for under warranty. The warranty is surly a big soft pillow we all get used to.

All of that said, the legends of dealers overcharging for parts & services is exactly the reason auto parts stores and your corner mechanic have a business model that works. Now, we all know there are a large number of parts which are dealer only. Some of which are exclusive, others are just too expensive to inventory. @ any rate one is forced to go see the dealer.

I think dealers for a long time have understood, largely they have a captive market, particularly for luxury and high performance cars. I do recall that Mercedes charged me $389 for a level 1 service which was no more than an oil change. This is the real reason I ditched the Benz & moved to the Infiniti, a car I can do most of the work myself.

Truth be told every consumer wants a good deal. All I ask is to be treated fairly. I don't mind a guy making a profit, but please don't give me a repeat of Bernie Maddoff.
Modified by 2007 M45 Sportster at 1:43 PM 2/4/2010

[fiveliterbeater]

[Double E]

I too understand business quite well and appreciate the perspectives of both so far.

I do want to add in that we should consider the comparison of the market prices given above to the parts dept. at a dealer. They are not quite an "apples and apples" comparison where one just happens to charge a lot more than the other.

The market prices provided from places like PepBoys or an on-line source have hundreds...even thousands of parts and services, for another 1000 or so makes and models. Their product width (selection) is wide and the depth (variety of each product) of each product is extensive...across all areas, including services.

That being said, looking at the dealer's parts business model, if you limit one ordinary parts store to carry one line of parts for one manufacturer's cars and then those parts only in one size such as a quart of fluid, you can see how your customer base shrinks considerably, ....yet you must remain in business as a parts store because of the sheer obligation to the manufacturer.

The result is dealer parts stores are expensive, to make up for lower sales volumes with the same general overhead expenses. Granted, the overhead total is less at a dealer's part store due to less sq ft size and labor required, but it's a proportional relationship and a certain expense.

PepBoys (and the like) have more parts to sell, can buy in larger volumes of those parts and then...they sell more parts.

Concerning labor, I think there's some room for additional perspective as well.

More to the point, the labor is high and I tend to disagree about the hour charged for 10mins of work such as with an air filter, but only because I can do it.

I also understand that it's not really a 10 minute job too. Yes, the act of putting the filter in is maybe 10 mins or a little more, but we all know that at the dealer, there was more to the job than just opening up the hood and making the swap. The service writer had to take the order, the tech went to the parts dept. & got the part. The car had to be driven in, the disposal of the old filter took place, the disposal of the new filters wrapping took place, the tech did an inspection and found an additonal concern (maybe about the belts being cracked or a cut sidewall) and told the service writer about it, the car had to be driven out of the bay, the service writer spent some time with you discussing the transaction, the cashier took your bill and processed it...you get the idea. There are additional costs that go beyond the act that are part of any business.

It gets to the point that it's not worth bringing the car into the bay for less than $60 ...and then the actual work still needs to be done. Ridiculous at first glance, yes, but most people don't care to know what portion of the bill is paying the cashier, service writer, trash, lights or how long the actual time it takes to pull the car in the bay, pop the hood and begin to make the swap is either.

Ok, so concerning labor, you may then wonder how Pep Boys does it for so much less $. Well, the parts analogy from above applies to labor too; but now the Techs are specially trained on one single make (and a fairly complicated one at that).

Because of the investment in each employee's training and tools, they want to keep all of them (that are good), so they probably pay them a tick more then Wal-Mart's auto or Pep Boy's auto does.

Don't forget about the free wash & vacuum at each visit, free loaner, mints and bottle of water.

I don't especially like the system and the resulting cost of stuff I can't do or buy elsewhere, but I do generally understand and appreciate it.

[1scott]

Steve, I get the service at the dealer becuase my car is still under warranty. But if you read a post I made earlier on my dirty intake manifold, the dealer wanted $249.00 plus $49 labor to change the air filter! The air filter costs $36.00, so around $335 + tax. I thought they should have done it out of good will as the original oil burner engine did the dirty dead, no such cooperation and I was not up to the haggling, but thats for a different post.

Anyway, I did the air filter myself in a few minutes and had the intake done for $60.00 plus around $25 in shop chemicals. Thats a huge difference.

Now, the oil changes at the infiniti dealer near my house are only $39.00 and I get a car wash, now thats a great deal! I also recently had the dealer install my tires and align the car and it was very competative (Not the tire prices, they were double the internet tire prices).

I hope that helps keep the lights on.

[2007 M45 Sportster]

I hear ya Steve, but fair is fair. $108 for a cabin filter is just rediculous, unfair even. Like I said, I don't need Bernie Maddoff to fix my car.

Regarding you point around the labor question. I don't mind paying a professional for good service. You have read my posts about Infiniti of Tyson's Corner. The techs & service consultants are great. The customer service & attention to detail is great. Not to mention they are 2 doors from my office. I will happily pay the labor rate for the great service.

If any dealer needs to make the sort of margin I've listed above, compared to PepBoys & others, perhaps they should buy fluids & consumables from PepBoys.

[M45Caliber]

Also keeping in mind that the after market "pep Boy" prices ALSO have a profit margin built in. FOr whatever reason, my Infiniti dealer doesn't seem that expensive compared to local indy ASE certified mechanics. The "secret" for me on these "mongo" 30K and 60K services is to NOT pay the $1500 or whatever, but to go in "ala carte" and request: oil change, trans flush and coolant flush, for instance. And save hundreds off the "package price".

[SteveTheTech]

From the beginning of my time here at Nico I have preached education to the customer. This has been a stark contrast from the opinion of many dealer employees. Although my income is directly related to how many labor hours I turn I am way to honest (typically to my own financial detriment) and just want someone to take care of these cars correctly. This really does not require millions of dollars.A few thousand well spent throughout the life of the car are all that are ever needed, not including random issues.

People like Pat Goss and the other TV car doctors are heavily sponsored by non specific additive companies. These cars don't need more chemicals they need taken apart once an a while.

Educate yourself as you would before purchasing any type of services to be performed on your other material items. Do you low ball the plumper or want the cheapest dentist (from my experience that is a life lesson everyone should try ) but not all of us are in need of the boutique level services. Some people enjoy the ability to drop their car off and pick it up and the biggest factor to them is timeliness and piece of mind and price is less of a factor. I have many regulars that drop their car off and just get whatever is next on the list. If you know that you need an oil change and rotation and there is a special combining those with something like a balance or alignment for a fair price why not get that? I know that many dealers cannot compete with the cost savings at your local Costco but the quality of service and technical aptitude are not up to the same level, I've worked with some of their guys. You are much more likely to leave there with a scratched wheel.

Less is only more sometimes, but in this market most of the dealers would really like to win over or keep some of their customers and they almost always have some sort of promotion in their parts or service department. Buying parts from some of the ebay selling dealers but try to stick with OE or better and not just the cheapest Nascar supporting brake fluid on the Pepboys shelf. Your car really deserves it.

Every dealer is independent owned and managed they set their own price points on some things and depending on what market you are in the competition will keep them in check. I know my district is very competitive and we have a very active rep they constantly monitor the competition both other dealers and prominent service facilities in the area.

[Godwinr]

Where does justifying dealer markup come into play with my situation? I wanted to buy my lease and JBA infiniti (Maryland) wanted to add a $1000 to the cost of my car because as the manager said, "It's pure profit, to keep the lights on". I can understand that if I was coming in to buy a new or used car, but a car that I'm already driving? , Even Infiniti Financial said they weren't suppose to do that. The only cost that should have been added was a $150 transfer/acquisition fee.
Modified by Godwinr at 5:00 AM 2/6/2010

[SteveTheTech]

^ Customer education

[DELUNASC]

Working on a car is tough, but not rocket science. I believe dealer prices for parts and service are crazy...

But, somethings only the dealer can fix, and I do respect them for that, and will pay the price they request...
Modified by DELUNASC at 9:59 AM 2/6/2010

[Godwinr]

^ Customer education

Uh, you're still not saying much. Please explain customer education and my situation. Are you saying what the dealer was trying to do is justified?
Modified by Godwinr at 10:12 AM 2/6/2010

[maxnix]

Uh, you're still not saying much. Please explain customer education and my situation. Are you saying what the dealer was trying to do is justified?

He's saying caveat emptor!

[2007 M45 Sportster]

Where does justifying dealer markup come into play with my situation? I wanted to buy my lease and JBA infiniti (Maryland) wanted to add a $1000 to the cost of my car because as the manager said, "It's pure profit, to keep the lights on". I can understand that if I was coming in to buy a new or used car, but a car that I'm already driving? , Even Infiniti Financial said they weren't suppose to do that. The only cost that should have been added was a $150 transfer/acquisition fee.

Modified by Godwinr at 5:00 AM 2/6/2010

Well I think we have two diffrent issues going in this thread. Regarding your problem above w/ JBA, you should first carefully read and understand your contract. Then hold them to it. Your experience with a lease buyout is not related at all to markup on service items. Folks have known for years that used car salespeople will try everything to take advantage of an unwhitting customer. (You in this case) & yes, your current leased care qualifies as a used car. If you can't get JBA to play fair, then just turn it in & walk away.

Sure, you can go the route of the Better Business Bureau, Attorney General's Office of Consumer Affairs and complaining to Infiniti Financial, but at the end of the day all you will get is a big headache and an offer to turn the car in & close the lease.

As I say this has nothing to do with a 500+ % markup for an air filter or qt of brake fluid. However, to Steve's points of needing to keep the lights on & pay the techs, I understand, but I think there needs to be abetter way.

At the end of the day, look at what we have here. A bunch of guys on an enthusiast blog site complaining about how unfairly we are treated by dealers who sell a brand we all love. Speaking purely as a marketing professional here, this is dumb. If the goal is to build & maintain brand loyalty which builds into reprat business, the manufacture must work with the dealers to find a way to not scare consumers away, but welcome them in.

For example, BMW offers 50,000 miles free maintainance. Harley Davidson sponsors maintainance days at it's dealerships, discounts on service & free hotdogs & a big party. This is how you build brand loyalty, not with a $30 qt of break fluid.
Modified by 2007 M45 Sportster at 8:29 PM 2/6/2010

[SteveTheTech]

For example, BMW offers 50,000 miles free maintainance. Harley Davidson sponsors maintainance days at it's dealerships, discounts on service & free hotdogs & a big party. This is how you build brand loyalty, not with a $30 qt of break fluid.

As a marketing guy you must know that nothing in life is free.

There is no such thing as free maintenance. Stretching the intervals and integrating the price of the into the sticker is actually brilliant more for the purpose of it actually gets people in the door. Many Infiniti new customers are actually getting into the maintenance contracts which cover everything with no out of pocket cost to the consumer and at a price that averages <$2k for maintenance that should cover the warrantable life of the car.

For first and CPO owners these cars are very similar to BMW in regards to the maintenance. Although Infiniti joined the party a couple years later their plan covers everything except tires and brakes.

Not having to pay for anything is an interesting decision making factor and I would imagine that is crucial to some but that really shouldn't be the top priority.

He's saying caveat emptor!

If a salesman can get you to pay for something that is actually their job. That is more the salesman than the facility.

[Double E]

Agreed, this lease buyout (profit) fee is a consumer education issue and different than the posts about parts & service costs.

Do business there or not ...but your lease contract is your contract and relies upon your knowledge of its details.

[Godwinr]

That's why I didn't do the lease buyout (my knowledge). One thing I will not do however, is argue with business's over products when I can simply not give you my business, which means not giving you my money. Educated or not, business's still have a moral obligation as an entity trying to make money, and customer satisfaction plays a big part in that. Although some may say this is a different topic, customer satisfaction overall, does pertain to this topic and is very relevant.

[npark]

This is an interesting thread and one that I can see both sides on and understand how both sides could be heated about their stance. I did however want to add an some extra info that hasnt been touched on. My background was, emphasis was 6 years in a manufacture parts department. I did both backcounter (parts for the techs) and front counter (walk up and wholesale).

There was a post about what the dealer charges for parts as compaired to online, pepboys, etc and had the prices. One thing that is not even considered here is what the dealer/parts department had to pay for the parts from the manufacturer (in this case Infiniti). Lets use the break fluid as an example; $24 and $6.99, dealer to Pepboys respectively. I would venture a guess that if the dealer is asking $24, that they paid more than $6.99 to Infiniti corporate for the maunfacturer specific brake fluid. Infact I would bet it closer to ~$10. So it is not financially possible to sell it at the lower price.

Point being the manufacture themselves are partly to blame for the prices you see at a dealer. In this day and age of manufactures not making as much on the sales of new cars, they have to find other ways to recoup that loss and parts ARE the biggest area they (the manufacture not dealer) are able to help cover that gap.

I am not here to exonerate the dealer themselves though. There is some gouging that exists there too. The industry standard is a markup of ~67% to as was said keep the lights on and pay the bills buuuuutttt and this one is big. Many dealers charge more to the shop customer (backcounter) then to the walkups (frontcounter)...of course wholesale is discounted off retail for independent shops so they can stay in business too. So here is something to think about, we used to have an entire different pricing to the shop at a MUCH higher profit margine for people that brought their car in for service...this was justified for the "conveinance" of being able to bring you car in for a one stop shopping/fix.

Moving on this also applies to the labor rate and time, there is warranty time (paid by the manfacturer to the tech) book time (which is what is generally accepted for the job) and CP (or customer pay). Warranty time is pretty much where the tech gets screwed by the manufacturer and many times takes longer than he/she gets paid...unfortunate yes. Also parts department gets the shaft because they get to make little to no profit on the part...Ii can elaborate if nessecary but we will move on for now. Book time is typically honest hours for what the job should take, it is, in many cases established by companies like alldata or chilton and is the industry standard whether you go to the dealer of independent shop. If the tech is good/smart enough to beat it then that is his/her profit margin for being efficient and can move on to other jobs to make more money. Now the "if" factor is the CP time, this is where the tech gets to quote what he/she would like to get for the job...reguardless of the book time. The parts department will also typically use a "matrix" pricing at this point too which is that higher profit margin. Something extra to note here is sometimes the service advisor will pad his hour rate here too. The normal shop rate might be $100/hr, now warranty would prolly only be paying ~$75-80/hr at that point but on a CP job the service advisor might take the techs quote and sell it at $115/hr. If the service advisor sells the job to customer and they agree to pay it then deal is done...more money for parts, tech and advisor.

So what you as a consumer needs to do is be informed and do your research. If your service advisor say 900 to do your xyz repair and 500 is for part and 400 for labor. You need to find out what book time is for your job, ask what the shop hourly rate is and find out what average retail is for your FACTORY part. These are all negotiable prices rate too...they dont want to lose your business. Cant hurt to say/ask well I have seen this factory part for sale for 50 less at xyz Infiniti and I called xyz independent shop they told me they would do the job for .5 hours less...is there anything you can do? It really just comes down to being informed on this just like you would when you buy your car. If you go in and say you want the car and don't know what invoice is or what the cars are selling for then you are asking to get ripped off.

So this is my 2 or 7 cents take it for what it's worth
Modified by npark at 8:47 AM 2/7/2010

[Double E]

"business's still have a moral obligation as an entity trying to make money, and customer satisfaction plays a big part in that. Although some may say this is a different topic, customer satisfaction overall, does pertain to this topic and is very relevant."

-Agreed. Good point.

[pwlorraine]

I've had Audi's and BMW's for the last 10 years and I use the dealer exclusively unless I'm doing the work myself. What is critical for me is trust that I am paying for expertise to fix the problem and a commitment to my satisfaction - and secondly that I'm paying for necessary work. I've had excellent experiences at both my local BMW and Audi dealers - and somewhat unfortunately due to the needs of the cars involved got to know my service managers quite well. Prior to that, when I drove a Camry and my wife a Subaru I experienced all sorts of creepy stuff - work being claimed that was never performed, parts disappearing before I could look at them, parts being claimed to be replaced that weren't even on that model of car. Part of the luxury car experience is service - you pay more for it but expect to be treated well - getting a loaner car, being kept informed. My hope is that Infiniti treats me well - if not I'll get something else next time. Maintaining a dealership is an expensive proposition.

Peter

[NightWatch]

All dealers across the board will charge more but should be offering a level of service that meets the industry standard.....

Level of service? My Infiniti Service department can even rotate my tires without nicking the heck out of my wheels with the air wrench.... That's service?

I've always been one to say "you get what you pay for", however, I'm open to re-evaluating that with the competency of service I've received at 3 infiniti dealerships over the past 7 years. I don't mind paying a little more if the quality is there, but Infiniti is really loosing my confidence. I'd rather find a competent independant mechanic who wants my business and is willing to earn it rather than continue to go to a dealership that somehow thinks they're doing me a favor by servicing my car.

[Poyzinous]

Item ------- Dealer Price --------- Market PriceCabin Filter ------ $108 ---------- $22 + Shipping (Online)Break Fluid ------ $24/qt ------- $6.99/qt (Pep boys)Air Filter ------ $77 ------ $29 (Online)

Is that what your local dealer charges? Here where Steve and I work, its much cheaper.Cabin filter (p/n 27277-EG025) - $47Brake Fluid, Dot 3 factory $8 Dot 4 BG fluid- $20Air Filter (p/n 16546-EG000) - $28 I have no idea how you got the prices you just mentioned

[SteveTheTech]

While you may be able to find an independent shop that can satisfactorily service your M. Just make sure you get records of everything the do. Things happen and I will not defend sub standard work from the techs and they should be held to a higher standard than most techs.

I would hope you would bring any issues like this up to the service manager in a calm manner and you should get your situation resolved. Like an other customer service based occupation happy customers keep the lights on.