Who pays for new car check in??

[Scott]

I agree with ChevAustin and jrcal. We recently changed our ways and now the Service Dept is responsible. There has been a vast improvement in the stocking in of the vehicles etc. The only item in the process that gets handled by sales is the assigning of the stock numbers which is done by the title clerk.

SMILE !

[MARY SHERICK]

WHAT SHOULD BE CLARIFIED FOR THOSE UNFAMILIAR WITH THE DIFFERENCE IN LABOR RATE SUPPORT FOR GM DEALERS, YOUR INTERNAL ACCOUNTING PRACTICES CAN INVALIDATE YOUR LABOR RATE, SINCE A PDI REPAIR ORDER IS STILL CONSIDERED BY GM TO BE A WARRANTY DOCUMENT. IF YOU ARE OPTION C, THIS WILL WORK. BUT, IF YOU ARE A DEALER WITH A LABOR RATE ESTABLISHED UNDER OPTION A, BE VERY CAREFUL!!!

[robc]

***Please note clarificaton***

I wanted to make sure that everyone understands that the above discussion is discussing "internal accounting practices" and not your internal labor rate. I have already gotten two confused e-mails asking me about this. Your internal labor rate is NOT used when calculating an Option "A" warranty labor rate, and I don't think that is what was being suggested.

Back to the point, using the break-down as Gary suggested is not going to affect your labor rate standing.

Let's use his example to clarify. If the PDI pays $102, no manufacturer cares how that money gets split up among the various departments. If $50 goes to the shop for the mechanical prep, $40 goes for clean-up and $12 goes for administrative tasks, it makes no difference. That type of transaction has no bearing on a dealer's warranty labor rate.

There are internal documentation that could alter your warranty rate, but they would only apply on those things that are measured, which in GM's case is "customer labor repair orders" or customer-pay repairs.

If you have more comments or questions concerning labor rates please e-mail me, I don't want anyone left with the wrong impression.



------------------
** Rob, Editor WD&S **
Help is only a message post away!
robc@dealersedge.com

[sallen1]

For GM accounting...

You know that PDI is directly credited to your open account when you are invoiced for the vehicle. You probably charge the PDI to New Vehicle Inspection account and also have a 72%+ gross profit on that line. WATCH OUT!! This is going to be a focus of GM expense control. Their reasoning: why should you get 72% on NVI but only 69% on c/p labor? One idea: charge some of the detail/checkin/paperwork expense to the cost of sale account for NVI (drops the gross percentage) Just a thought...

[Michael White]

Rob, I have concerns on gorss profit on PDI's and what GM would do. I do not think it is prudent to show a high gross profit. Who knows what GM will do with that info. Can you really trust them??

Mike White