DealersEdge Professional Forums

I'm thinking about adding a new component to my warranty outside service business. That being increasing labor rates...basically, I charge a flat fee of X amount of dollars, and in return I will do the legwork. Labor rates here in Southern California range from the mid $70 to $105...most dealers have never requested an increase. My questions are twofold...first, would you pay for a service(if you are a service manager or dealer principle), how much would you pay(I was thinking around $5000, depending on size of the dealer) and secondly, what is your warranty labor rate and do you think, if u could, you could increase it?

Why pay you 5000 for something any dealer/service manager should be doing on a yearly basis. I go for an increase almost every year, the paperwork takes about 3 hours to complete with the labor rate survey of the market and the repair order info that is requested. My current rate is 97.oo and just went for an increase to 104.00 ,we will get that easy. This dealer had not applied for over 2 years beore I got here 3 months ago. It sounds like to me if you can do the legwork for the dealer and I am assuming you are paid a % of dollars claimed-you will benefit anyway from the increase. If it had any value it may be a small fee -500.00 for preparing documentation.

Sounds like your on top of it. I was thinking about approaching dealers that I don't process warranty for, dealers where I have trained their administrators. I am just amazed at how many dealers have never applied for a labor rate increase, despite raising their c/p rates. It's like either they don't know how to do it, or are too busy doing other things. Sounds like you're on top of it. Most dealers/service managers aren't. It's amazing...a dealer down the street's labor rate is more than $20/hr less than mine. It adds up in the long run.