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Those "certified" shops you are generally referring to are basically parts and/or service dealers who must go through the same training and expense as OEM dealers. They are more like OEM dealers at that point. I know one of them very, very well. They also tend to be in more remote areas or where there is no established OEM dealer already.
Most manufacturers in the truck business have actually reduced the numbers of these in recent years. OEM dealers have opened more of their own rooftops, and when they do, they OEM can pull the "independent" shop's authorization to do warranty repairs and get those tools. If you read the fine print in their contract with the OEM there is usually fine print that gives the OEM several ways to pull the plug on them at any given time. In my area I know of a "certified" Freightliner and International dealer that both got run out of town by an OEM dealer moving in, and one more Cummins dealer is on the way out for the same reasons.
These "certified" shops you speak of are slowly dying off. But even so, they are really small dealers anyway....
If the OEM is opening up its own shop, what is the problem? This is contradictory to what you have been saying all along in that it would be too expensive for a manufacturer to open its own shops. You are now saying that they are. Which is it?
My point was that there are ways to get rid of the dealership model either through the OEM opening up their own or through licensing independent shops to do work for them. That is exactly what you just said above.....
Manufacturers don't need dealership for maintenance, service and recalls. For that they can start certification program for mechanics/repair shops so customers know who to trust for service.
It has been reported many times that automobile dealerships don't make much profit from new car sales -- they make most of their profit from the service department.
Eliminating the intermediary should be pretty simple. Just close the new car side of the lot, which wasn't making much money. Then, the dealership only needs to successfully operate the service side to make a good profit.
It has been reported many times that automobile dealerships don't make much profit from new car sales -- they make most of their profit from the service department.
Eliminating the intermediary should be pretty simple. Just close the new car side of the lot, which wasn't making much money. Then, the dealership only needs to successfully operate the service side to make a good profit.
The profit made from a new car sale can make up about 30% of the dealerships total profit when you take into account in house financing, holdbacks, dealer cash incentives, add-ons, trade in profit, etc.....
For a dealership that makes $250k profit, that amounts to about $75k per year. Not a gigantic number by any means, but enough to make it worth their time to try to sell you a car to drive that profit up.
The concept of switching the car dealer over to strictly a service center isn't a bad idea actually. Their service markups can be astronomical so they would definitely make a hefty profit while being able to shrink their footprint and their overhead.
Dealership service department? That's the reason we need dealerships? I drive a Jeep Wrangler. I'm pretty sure the service departments at Chrysler dealerships are modeled after one of the circles of hell in Dante's Inferno. It's the one where the dealer is denying warranty coverage and blaming Chrysler while the Chrysler Cares rep is saying the it's an issue with the dealership and their hands are tied. Meanwhile you spend eternity going from one to the other for help while you're paying a Wrangler car payment to drive around a rental Dodge Caliber. If that went away, I wouldn't lose any sleep over it.
Warranties are essentially an insurance policy on your vehicle. Insurance companies already do an ample job of working with certified independent mechanics to get work done when claims are filed. I don't see why warranty work wouldn't work the same way. When I get my car repaired under an insurance claim, I can go to whoever I want. If I go to their recommended people, it's an easier process. I make that choice. And it's fine. It's better than any dealership service department experience I've ever had.
I recently bought a car from Carvana and it was the best buying experience I have ever had buying a car, and I have purchased at least 30 cars since I started driving.
It did help that I was already familiar with the car I was purchasing. After looking locally, in the region, eBay motors, etc..., Carvana offered the best price and experience. I clicked on the car I wanted, arranged payment from my bank, signed some online documents and the car was delivered to my house on a flatbed. I had 7 days to test drive it. It was exactly as described and very clean.
Love it. No hassles. I will certainly buy again from Carvana.
After reading a dozen pages I gave up. This has dissolved into a traditional "I hate dealerships" thread. Far too many people who know far too little about wholesale/retail auto business pontificating about personal experience.
Hate dealers? Don't go to one. Buy a cheap POS off Craigslist and keep the shade-tree mechanic down the road supplied in Schlitz Malt Liquor for the ongoing work needed to keep it on the road. In the meantime, dealer will continue to invest $Millions into local economies and employ hundreds of people selling/servicing/providing warranty work in your community.
The profit made from a new car sale can make up about 30% of the dealerships total profit when you take into account in house financing, holdbacks, dealer cash incentives, add-ons, trade in profit, etc.....
I have never - in wholesale, retail, and public fleet management - heard of a dealer making 30% of their profits from new cars.
For a dealership that makes $250k profit, that amounts to about $75k per year. Not a gigantic number by any means, but enough to make it worth their time to try to sell you a car to drive that profit up.
Any new car franchised dealer that only makes $250k on their investment needs to get out. Fast. Franchise fees, real estate, buildings, inventory, utilities, and ongoing overhead require millions invested. Making $250k is hideous return on what will be put out for a franchised dealership.
The concept of switching the car dealer over to strictly a service center isn't a bad idea actually. Their service markups can be astronomical so they would definitely make a hefty profit while being able to shrink their footprint and their overhead.
This is why you see so many independent shops selling used cars only and the new franchises are owned by large dealer groups. They have the deep pockets needed to fund the operation and can duplicate the processes to ensure good service for the customers and a positive image for the manufacturers.
This is why you see so many independent shops selling used cars only and the new franchises are owned by large dealer groups. They have the deep pockets needed to fund the operation and can duplicate the processes to ensure good service for the customers and a positive image for the manufacturers.
Possibly because your unfounded bias is hard to swallow.
Found the dealer shill
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I just threw up a little in my mouth 
