Main Dealer wants to charge "to use their tools" - WHAT!
Discussion
Fox- said:
On the whole overheads thing, does anyone know why main dealers on the Continent are dramatically cheaper on an hourly basis? They have the same franchising requirements, diagnostic kit and glass palaces. A lot of people here seem to support the £100+ an hour labour rates but this seems to be very different to the situation in the rest of Europe. Even somewhere like Germany which has a higher GDP per capita than us and higher wages and strict regulation manages to charge significantly less on average at main dealers?
Reason I've seen is that premises costs are cheaper in other countries. I've seen it said that France used to be cheaper, but isn't now. I'd be pretty surprised if a franchised BMW / Mercedes etc dealer in Germany was cheaper than one in an equivalent size of city in the UK.I guess the same happens in the UK - Warranty Direct did a report and London/Thames Valley had the highest average rates, Scotland the lowest.
Jonnas said:
WhereamI said:
You don't know that, it is quite possible that they don't charge like that to avoid having an even larger hourly rate on jobs that don't require that piece of kit
Of course it is, it would be impossible to forecast how many times per annum you would be able to charge for that particular piece of equipment. You cannot account for a business like that. You can forecast how many labour hours you can charge for per annum so this is where you will include the overhead cost. Otherwise you can't budget to recover it. Running a business otherwise is a lottery....Loading every single overhead into your base costs means that you would be quoting some pretty simple tasks at an extortionate price and complex tasks would be a bargain. If I did that in my business I would be pricing myself out of the market in some areas and doing other work at give away prices.
If we buy a piece of equipment or hire someone with a specialist skill of course we forecast and monitor how we can sell that facility and how much money we will be able to make from it. Any business that doesn't do that is one with a problem.
Jonnas said:
GavinPearson said:
Profiteering............. they own a for profit business. You ask them how much it will cost to use the equipment - they give you a price (could be free, could be a lot of money), you haggle, then you decide - you either take or leave the offer.
Personally I think the garage would be smart to do the diag for the normal hourly rate but then waive the cost if they do the work but they clearly have to figure out what works for them. Either way, the business is not a charity and should not be treated as such.
I'm sorry but that just isn't right. The cost of buying and running the equipment will already be included in the hourly 'labour' rate, adding a fee will mean you are paying for it twice. This rate will also include a margin so there is also a profit being made. Personally I think the garage would be smart to do the diag for the normal hourly rate but then waive the cost if they do the work but they clearly have to figure out what works for them. Either way, the business is not a charity and should not be treated as such.
You also don't really have much of a choice if you want to ensure that the main dealer carries out the work on your very expensive P&J and maintains its history. I bet that these additional costs are not clearly highlighted when you buy the car.
Like I said, profiteering. You can still make a profit and not be a profiteer......
That is a not reasonable expectation.
When you buy a car you are making a part rational / part emotional transaction. The rational part is that it goes from A to B, costs a certain amount, uses fuel at a certain rate. There is plenty of information about reliability available - through Which? used car guides for example. And then you look at how it looks, the way it drives, the features, the brand prestige.... and then you buy the car.
The amount a dealer charges for labour and parts is part of that equation, and it's also a reason that some very expensive brands of vehicles depreciate very heavily - once they reach a certain age or mileage they become very costly to maintain. If a dealer sets their prices at a very high level and people choose to accept that (by buying the car) then they shouldn't be forced to make exceptions.
The fact is that there are laws that protect the consumer so that codes and workshop information can be accessed by any garage so somebody could in theory use any garage to do the work. If you want the work done by a franchised dealer and get the coveted stamp, then you have to pay their rates.
GavinPearson said:
The issue is that the OP wants to borrow special equipment that the dealer has purchased without paying for it.
He doesn't want to borrow anything.Doesn't the fact that the dealer in the OP is very much in the minority for charging the way they do tell you something?
WhereamI said:
Quite frankly, that's nonsense.
Loading every single overhead into your base costs means that you would be quoting some pretty simple tasks at an extortionate price and complex tasks would be a bargain. If I did that in my business I would be pricing myself out of the market in some areas and doing other work at give away prices.
If we buy a piece of equipment or hire someone with a specialist skill of course we forecast and monitor how we can sell that facility and how much money we will be able to make from it. Any business that doesn't do that is one with a problem.
Quite frankly, I have a sneaky suspicion that you are comparing apples and oranges here. I wont say nonsense because its not but it is not correct for the context in which we are talking.Loading every single overhead into your base costs means that you would be quoting some pretty simple tasks at an extortionate price and complex tasks would be a bargain. If I did that in my business I would be pricing myself out of the market in some areas and doing other work at give away prices.
If we buy a piece of equipment or hire someone with a specialist skill of course we forecast and monitor how we can sell that facility and how much money we will be able to make from it. Any business that doesn't do that is one with a problem.
This may be true in a business such as construction whereby you hire or buy in particular equipment or specialist people to complete a particular job. It is easy to attribute specific overhead costs to a particular customer but in the service part of a main dealer, you are selling time and parts. Overhead cannot be attributed on a job by job basis, you have to amortise it.
The component ocsts of the time you charge for are comprised of the labour cost and the overhead cost. You would never in a million years charge different rates depending on the fact that the technician that fixed your car was paid more than another or for that matter dependent on the tools that he used for that particular fix on your car. A business like this is just not costed like that, it isn't practical.
The crucial issue is that the diagnostic kit isn't a normal tool. It is a crucial differentiator between the franchised dealer and the cheaper independent alternatives.
Once the customer has the diagnosis in-hand, they can go where they want to get their car fixed. So why should the dealer bend-over and provide that in return for 15 or 30 measly minutes labour rate?
If the customer wants to use their dealer for the barest minimum rather than the whole job, then they should expect the dealer to play their sole remaining 'bargaining chip' and charge a decent price for that service.
If the customer uses the dealer for the whole job, then the diagnostic fee should be reduced or refunded.
Once the customer has the diagnosis in-hand, they can go where they want to get their car fixed. So why should the dealer bend-over and provide that in return for 15 or 30 measly minutes labour rate?
If the customer wants to use their dealer for the barest minimum rather than the whole job, then they should expect the dealer to play their sole remaining 'bargaining chip' and charge a decent price for that service.
If the customer uses the dealer for the whole job, then the diagnostic fee should be reduced or refunded.
wormburner said:
The crucial issue is that the diagnostic kit isn't a normal tool.
Of course it is, simply because best practice deems it as a basic requirement in a franchised main dealers workshop, not forgetting the cars electronics are designed in such a way that a diagnostic unit can be plugged in to assist problem solving and the resetting of particular parameters etc. Also don't forget (and this is an important point) one of the beauties of designing cars that require a specific diagnostic bit of kit was originally to hinder or try to hinder customers from using non franchised garages - fact. So, in essence the kit is a tool that a main dealer could not do without, thus it's very normal tool for them to have at their disposal. Edited by Johnboy Mac on Thursday 16th August 18:15
wormburner said:
The crucial issue is that the diagnostic kit isn't a normal tool.
Yes it is. It's defacto standard equipment now and has been for well over a decade. Even scheduled servicing for many brands includes a fault code readout - and it's the first port of call for almost every peice of diagnostic work.wormburner said:
It is a crucial differentiator between the franchised dealer and the cheaper independent alternatives.
No it's not - most reputable independants now have similar diagnostic kit. Heck if you read the various forums even kids with laptops can diagnose faults (Well no, they can read codes etc - it still requires an expert to interpret whats wrong, but then that part of the work is covered in the labour rate not the machine charge) and even do vehicle coding these days! With this sort of thing available dealers would do well to encourage people to still visit them by not charging bizarrely random additional fees on top of labour charges just because it got plugged into the diag system.wormburner said:
Once the customer has the diagnosis in-hand, they can go where they want to get their car fixed. So why should the dealer bend-over and provide that in return for 15 or 30 measly minutes labour rate?
If the customer was going to do that, why not just go to the indy and pay half the measly labour rate for the same job? Edited by Fox- on Thursday 16th August 18:13
The reason people get a main dealer dignosis and then go elsewhere to have the car fixed is because the prices are so steep, it's not a huge leap of imagination to work out that paying well over the odds to change the sensor that has put the warning light on is not money well spent.
Add in the dignosis fee and the VAT and the sensor that could be bought for £20 on ebay is up round £150 to £200 at a main agents.
Lets face it, cars are much more complicated now and it suits the manufacturers/dealers, my bloody Transit is forever lighting lights and telling me of problems, mostly phantom, mostly sorteable with the code reader and a reset. if I took the damn thing to a main dealer everytime it showed me the yellow spanner I would be thousands out of pocket by now.
The scanner is a tool now just like spanners and screwdrivers are and it should not be charged for use. I will not pay to have a code read or a service lamp reset.
Add in the dignosis fee and the VAT and the sensor that could be bought for £20 on ebay is up round £150 to £200 at a main agents.
Lets face it, cars are much more complicated now and it suits the manufacturers/dealers, my bloody Transit is forever lighting lights and telling me of problems, mostly phantom, mostly sorteable with the code reader and a reset. if I took the damn thing to a main dealer everytime it showed me the yellow spanner I would be thousands out of pocket by now.
The scanner is a tool now just like spanners and screwdrivers are and it should not be charged for use. I will not pay to have a code read or a service lamp reset.
We charge half an hour to do a diagnostic check, typically it takes an hour when you factor in bringing the car in to the garage, shifting a few others about to make space etc and then bringing it back out again.
If the customer wants to go ahead with the repair with us then the diagnostic charge is refunded, we don't charge extra for the use of the equipment.
If the customer wants to go ahead with the repair with us then the diagnostic charge is refunded, we don't charge extra for the use of the equipment.
Ozzie Osmond said:
Have a nice day in your Morris Minor!
Do you own a computer? Has it worked for 10 years? I don't understand why expectations of cars are so much higher than other stuff people buy.
I own a lot of cars with computers, ~I never pay to have them scanned if any faults come up, if the garage wants my custom they will use the scanner and then charge me to fix the problem, thats what garages are supposed to do, charging me to find what is wrong not going to happen. If my morris minor had a broken spark plug I would not pay a man to remove the old one, look at it, put it back and then tell me it was broken, I would pay him to find the fault and fit the new plugs.Do you own a computer? Has it worked for 10 years? I don't understand why expectations of cars are so much higher than other stuff people buy.
Next point, the computer, yes i do have one, and if PC makers could make a computer the way car manufacturers make the control units for cars I would have lots less trouble. Mind you, it's a stupid comparison anyway as the cars ECU is running the car as a largly closed loop doing the same functions over and over again to a monitored pattern, not getting updates and upgrades all the time and people adding and removing programmes, clogging up the system with all sorts of data, some viral.
Getragdogleg said:
I own a lot of cars with computers, ~I never pay to have them scanned if any faults come up, if the garage wants my custom they will use the scanner and then charge me to fix the problem, thats what garages are supposed to do, charging me to find what is wrong not going to happen. If my morris minor had a broken spark plug I would not pay a man to remove the old one, look at it, put it back and then tell me it was broken, I would pay him to find the fault and fit the new plugs.
Next point, the computer, yes i do have one, and if PC makers could make a computer the way car manufacturers make the control units for cars I would have lots less trouble. Mind you, it's a stupid comparison anyway as the cars ECU is running the car as a largly closed loop doing the same functions over and over again to a monitored pattern, not getting updates and upgrades all the time and people adding and removing programmes, clogging up the system with all sorts of data, some viral.
Diagnosing vehicle faults is chargeable work. If someone believes that diagnosis work is going to be carried out for free, using skills and equipment accumulated over the years, then be prepared to be disappointed.Next point, the computer, yes i do have one, and if PC makers could make a computer the way car manufacturers make the control units for cars I would have lots less trouble. Mind you, it's a stupid comparison anyway as the cars ECU is running the car as a largly closed loop doing the same functions over and over again to a monitored pattern, not getting updates and upgrades all the time and people adding and removing programmes, clogging up the system with all sorts of data, some viral.
How about these scenarios? (Numbers made up)
The dealer has invested a lot of money in a very expensive machine needs to rake in £1000 from the workshops over a 10 hour day to cover general overheads and make this machine earn its keep.
He can charge £100 an hour to everyone, regardless of what they want doing.
OR
He charges £80 to 8 people who just want tyre changing/spanner work and to the two people who require the use of his expensive machine he charges the usual £80, plus £100.
Which is fairer?
The dealer has invested a lot of money in a very expensive machine needs to rake in £1000 from the workshops over a 10 hour day to cover general overheads and make this machine earn its keep.
He can charge £100 an hour to everyone, regardless of what they want doing.
OR
He charges £80 to 8 people who just want tyre changing/spanner work and to the two people who require the use of his expensive machine he charges the usual £80, plus £100.
Which is fairer?
crofty1984 said:
He can charge £100 an hour to everyone, regardless of what they want doing.
OR
He charges £80 to 8 people who just want tyre changing/spanner work and to the two people who require the use of his expensive machine he charges the usual £80, plus £100.
Which is fairer?
Did you pull that out of fantasyland? Which main dealers don't charge £100+ an hour already?!OR
He charges £80 to 8 people who just want tyre changing/spanner work and to the two people who require the use of his expensive machine he charges the usual £80, plus £100.
Which is fairer?
Almost zero diagnostic work doesn't involve the machine anyway!
The 'expensive machine' performs a function almost any independant can perform. If more dealers start charging £100 on top of the already high labour rate for the use of said 'expensive machine' then people will just go elsewhere.
They are not unique and special anymore. As I said earlier, even people with laptops can perform the majority of the diagnosis now. The dealer needs to give people a reason to visit them instead and charging £150 to spend 30 minutes reading fault codes is not a way to do this. It just drives people into the hands of the independants from where they'll likely never return. You'll then be missing out on the chance to upsell them into newer cars, too.
Again, I've still to come across a main dealer who charges in this way. I#'ve never been charged more for the use of a fault code reader.
Edited by Fox- on Friday 17th August 19:09
Edited by Fox- on Friday 17th August 19:10
D900SP said:
Diagnosing vehicle faults is chargeable work. If someone believes that diagnosis work is going to be carried out for free, using skills and equipment accumulated over the years, then be prepared to be disappointed.
Did somebody actually say they expected diagnosis work or any work for that matter to be carried out for free by a third party? I paid £50 plus vat at a well known LR indy in Cheltenham to diagnose a fault.They returned the vehicle without fixing the fault.
The rear electric window stopped working. I was told with the vehicle plugged in they could operate the window remotely but when they disconnected the machine the switch would not work. On reflection it seems their diagnostic equipment was limited to only finding the fault. Possibly paying more at a LR main dealership would provide access to more comprehensive equipment that could find the fault and fix it.
The rear electric window stopped working. I was told with the vehicle plugged in they could operate the window remotely but when they disconnected the machine the switch would not work. On reflection it seems their diagnostic equipment was limited to only finding the fault. Possibly paying more at a LR main dealership would provide access to more comprehensive equipment that could find the fault and fix it.
Johnboy Mac said:
Did somebody actually say they expected diagnosis work or any work for that matter to be carried out for free by a third party?
They did, yes. They are clearly being ridiculous and the opinion they hold shouldn't detract from the main point that seperate £100-a-go charges for reading fault codes are ludicrous.Gassing Station | General Gassing | Top of Page | What's New | My Stuff