The Pros and Cons of Car Dealership Service Departments

Moneyland has an interesting piece detailing just how much people get ripped off on maintenance expenses at their car dealerships. Some highlights:

A car dealership service manager confesses that maintenance bills are routinely inflated with unnecessary fluid flushes and replacements, nickel-and-dime charges for regularly used “shop supplies” like rags and lubricants, and parts that the car owner could buy for 30% less at a store like AutoZone.

The piece is a summary of a Popular Mechanics interview with a car dealership service manager. The PM post is actually more positive regarding car dealerships and even details why you should go to a dealership as follows:

Let's use Ford as an example. If you own a Ford vehicle, the Ford dealership will have Ford-trained technicians who work on Ford vehicles 95 to 100 percent of the time. During that time they will use Ford resources and Ford training to repair your vehicle correctly, and (ideally) they take Ford classes and attend Ford schools to keep up on their knowledge. With the other guy, it's a tossup—he may work on two Fords one week and not see another for a month. Also, on regular maintenance it can sometimes be cheaper, not more expensive. To get an oil change and tire rotation where I live, the Ford dealer is $38.95 plus tax, and Sears wants $75.

A dealer won't come right out and say it, but if you have your regular service work done at the dealer... (because warranty work pays the dealer a lot less than service work), your value to the dealership increases. Here's an example: Suppose your vehicle goes out of warranty and a week later you have a catastrophic failure. If you have shown loyalty to the dealership by using them for regular service work, they will be more inclined to help you—as opposed to the person who buys a car there and takes it somewhere else for regular service, and only brings it in for warranty work.

So the reasons for going to a dealership are that they are experts in your car (versus a car repair place that works on all sorts of cars) and that if you ever need help, they're more likely to go to bat for you if you're a regular customer. I'll buy the first reason partially if it's a huge repair -- they should be able to fix it better/faster/with fewer problems. That said, you never know. I think the second reason is a bit lame. Simply buy a good-quality, highly-rated car and odds are that you won't need anyone to go to bat for you with a major problem.

And here are a few additional thoughts on this subject from me:

• I recently received a coupon from my car dealership. It was for an oil change and tire rotation for "only" $59.95. What are they doing, filling my car with liquid gold and serving free filets in the waiting room? Ugh! (Besides, I get my first two years of services free!)


• My wife had a noisy belt in her car and was quoted $220 from the Toyota dealership to get it fixed. We went to a local repair shop (which was highly recommended by a few friends) instead and had it done for $75.


• When I bought my car, the dealer told me that the automobile business model is built on the service department covering all overhead for the entire dealership. Then the dealer's profits are obtained by new car sales. Now you know why dealership service prices are so high -- there's a lot of overhead to cover!!!

Do you use a dealership for your car repairs and maintenance? Why or why not?

Comments

[jim]

I just got my car serviced & repaired at a dealer. The services I got there were right in the middle of the price range quoted on repairpal.com I wouldn't call it cheap but they aren't gouging ya either. They also had a discount deal for 6 oil changes for $130. I went there because I don't know of any local mechanics that are dependable and knowledgeable and cheap. Whereas the dealer has a good reputation. I'm sure there are independent mechanics that are trustable and good but I just have never found any.

[Tim]

My dealer sends out coupons on a regular basis and an oil change where they top up all the fluids is usually about $30. The dealers services are also in line with what it would cost elsewhere. This is a large volume operation where people have lots of choices so that might make a difference.

[PedroNY]

Something to consider, going to the dealer with your car if you plan to sell it back to them, or to trade it in. They will have history of the car, and you can always get a higher price when selling it back. If you get any pushback from the sales person, try the line, "Would you say you guys have top notch sevice level here?"; "I would expect a high price for the buy back based on all of how well my car runs due to all of you work"... anyway, just something to consider. I plan to trade in my 2002 Honda next year, so I started doing all of my oil changes at the dealer, it is $35 instead of $25 at Midas, but I think it will be worth it when I trade it in.

Cheers,

PedroNY

[Money Smarts]

We have a good local mechanic that we use that isn't at a dealership, and his prices and quality of work are almost always cheaper and better quality than our local dealership. In general the dealership service work tends to be overpriced and not always done as well. Just our experience here.

[Young Limey]

Another reason dealers are expensive has to do with the parts they need to use. Dealers must use brand name (Ford) parts, compaired to other repair shops which can use aftermarket (generic) parts. Just like a store brand item, it's the same part, manufactured for the same car, only not produced by Ford.

I have a friend who worked as an insurance adjuster, for car repairs after accidents. Many times insurance companies want to make sure repair shops only use aftermarket (generic) parts, to reduce the repair costs. They know they are just as good as the brand name parts.

[Jon]

I rarely go to the dealer. Last time I went they forgot to plug a sensor back in and I kept getting a pesky intermitent check engine light until I finally tracked down the issue myself.
My best experiences are with finding great local mechanic shops. I've had 2 so far, one for most any vehicle and one I found that was a Honda shop only (He was great by the way. Would often take 15-20 minutes to diagnose a problem over the phone for free.). Both shops have been great on price and not trying to force unnecessary repairs.
My advice...ask around for a good local shop, or go to the Car Talk web site and look one up there that is highly recommended.

[Luis]

Insurance companies know best how to skim for more and more profits and thats it, IMHO :).

You cannot convince me that using a high quality part made specifically for a certain type of vehicle gives the same performance as the generic brand, i am very sorry on that! Now I dearly hate inflated prices, but there are occasions when it is best to go to the dealership. That said, I alternate between going to the dealership and going to my trusted local repair place. New parts = dealership, other maintenance = local repair shop. In my town, I want everyone to stay in business, and that goes for the insurance companies as well!

[Danielle]

I absolutely refuse to use the dealership for general maintenance on my car, and only go when the repair is covered by my warranty. I have many reasons for this, but the most important is their pricing and the fact that they seem to arbitrarily price work -- the price always happens to go down quite a bit when I mention that I'll just have my brother who is a mechanic do the work. Also, some things quickly move from "absolutely necessary" to "if you want to".

[Luis]

May be a good time for all of us to brush up on BripBlaps negotiation strategies to getting the lowest prices on repairs.

[rippedoff]

I just got my Chevy truck back from the dealer. This is the fourth transmission that they put in it and the truck has less than 70,000 miles on it! It was out of warranty and they marked up the price on everything. I ended up calling their own parts department and they gave me a price that was $300 cheaper, so I bought directly from their own parts dept. and boy that really ticked them off. The reconditioned transmission that they put in didn't work so they replaced it with another reconditioned transmission. I was told that the reconditioned transmission was shipped with fluid in it but was charged for 8 qt of fluid that was also a different price than their parts shop. I was told that they would have me done in two days and it took 3 weeks. I will never by a Chevy and will never take it to my local dealer again!

[Linda]

Personally, we have had horrible experiences with Firestone. One time, went in for an oil change, they did a "check" and said the serpentine belt needed to be replaced. Husband went in and said, really, show me. They tried to - whereupon my husband told them that it had been replaced THE WEEK BEFORE (someplace else - it broke when we were out of town) with a brand new one. Guy turned red. We never went back.

My local Ford dealer happens to be great. The Subaru people on the other hand, tend to overcharge.

[Michael]

As someone who used to work at a dealership and was paid commission on the total shop billing, I can tell you that dealers make huge money off of their shops. It was a regular thing for us to get a car for transmission work as an example, the mechanic would spend less then an hour on the job throwing 90% of the new parts straight into the trash, and bill the customer for an 8 hour day. Honest mechanics would see the cash that the crooked guys were making and they would quickly decide to be crooked themselves. The service manager of course pushes for all of this to inflate their own paycheck. The dealership of course depends on the heavy billing to pay their sky high overhead and profit. Having worked for Chevy, Honda, and Lexus I can tell you it is pretty much common practice everywhere.

[jeffbone]

Linda: national chain shops are typically as bad as dealers, for many of the same reasons. I'll never darken the door of a Goodyear or a Firestone shop again, after having both of them try to rip me off, then lie about it. Same goes for AAMCO and Cottman Transmission.

Blatantly stolen from today's Consumerist:

http://consumerist.com/2011/09/how-i-stopped-a-jeep-dealership-from-ripping-me-off.html

[Don332233]

Best thing you can do is start a trusting relationship with a local mechanic. It can be part of a chain, but it's the manager/mechanic that make all the difference. I get the $20 oil change/rotation coupons from my local shop, and I use them. But I also tip them $10, or call to say I am bringing pizza to the shop for them for lunch (also about $10). This pays back in spades when you have a real problem: honest evaluation, preferred treatment, etc. These guys work hard for their money, and treating them like real people makes all the difference in the world.

[Christy]

I take my car to my Ford dealership and have never had an issue. The service staff and mechanics have been there for years and really know Ford's. They are slightly higher on their rates, but worth it to me to know that the service is done right. Also, when I was shopping for a used car, they gave me a used car evaluation for free. I believe this was due to my long history of going there. They pointed out on the car I was going to buy, that someone had put the wrong coolant fluid in the radiator, causing a "gum up" of the coolant which can create major repair issues. This is the problem you can have going to a shop where they do not use the right products for the vehicle.

Agree with the statements about Firestone. They are terrible!!

[KMI]

We use a local mechanic for our Mazda (the older car) but take the Honda into the dealer for most services that are more complicated than an oil change. We priced them out several times for various types of work, and they are always in line with what on-line costs and other quotes come in at. They have VERY convenient hourss, great customer service, and are willing to work with you on the difference between "We're told to recommend this to you" and "but we really think you only need this". They are also faster than many other places.

I think with dealership service departments, you can have the same issues you do with any mechanic. Some are great - some are scary. You just have to figure out which ones you can trust and stick with them.

[Owen Richards]

I have used all different types of service facilities, and they are only as good as the character of the people who own or run them. If you can find a good car dealership of the brand you own I have found it has saved me a lot of money because of not only the offers but they have looked my VIN up on the factory computer and many times I get no charge services because they have found that there may have been a problem in one area or the other. They have a direct technical link and have all the tools, those corner shops work on all kinds of cars. Would you like to have a GP doctor do your heart surgery if you should need it, I don't think so. If anyone has been ripped off they didn't do there homework, or have asked enough questions. I hope you would study the situation before having any repair done. I have also found that if you do to the maintenance you will have little problems. One more thing research the car or truck first, that will give you a clue as well.