DealersEdge Professional Forums

I know that we have all read and talked about how to handle shop supplies in our departments. I would like to know if anyone in a TEXAS dealership knows what the laws are. I know that each state regulates their own. There is a customer in the Austin area that is bringing law suits against every dealership he can for charging shop supplies. Since hearing that, we have discontinued the charge to the customer for ANY supplies until we have a clear understanding of what can and can't be charged. As you well know, our supplies account is now growing and we can't find ANYONE...including our GM reps that have a clue. I have contacted the state agencies in our area for a response...and they were no help. Let me know if you have a clue who we can talk to about this, or if you know the answer

I would start with the Texas Automobile Dealers Association (TADA). Call Karen Coffey at 512-476-2686. If anyone has a heads up on this, she will, or she can find out for you, providing your dealership is a member.

in michigan shop charges are ok as long as they are included and itemized in the estimate, and the estimate meets state b.a.r. requirements.

The simplest method to use is up your labor rate $5 per hour. This will also allow you to collect shop supply charges from extended warranty companys also. It eliminates any explanation at the cashier counter and will more than cover the actual supplies expense.

Are you kidding?

Doesn't this idea reinforce the myth that the dealer overcharges? YES

Does Goodyear, Firestone, Penske, or Jiffy Lube overinflate their labor rate? NO

Who charges by the hour anymore?

Isn't it hard enough to get people to pull onto our service drives?

I think the idea about raising labor rates is the easiest and most sound practice. If shop supplies have gotten to the point where you are losing money then packing into the labor rate as part of the cost of business is better than a tack on percentage charge. The main reason is you'll always be answering the "what the heck is this charge" question. (Believe me, if if they don't ask many customers are wondering that on the way out the the door, in their car, and at home that night.)

Second, by raising our rate you might be able to get the factory to participate in these costs as well (unless you are on some type of auto-increase with the factory).

I am not sure how we would think that the aftermarket does not consider shop supplies when pricing labor, adding a charge or that somehow this "inflates" our labor on repair work.

Oh wait, while I am at it ...

Does the dealer overcharge? Ummm... no, they might be more expensive on occasion but they don't overcharge. Are you telling me Roger Penske and his managers don't make millions? Aren't most of these aftermarket companies extremely profitable?

As opposed to the aftermarket, the dealership has the burden of warranty. Fulfilling that promise (made by the factory) requires special training, tools, facilities, etc. While this doesn't mean diddly when it comes to changing someones oil, it is a cost of business that dealers have that the aftermarket does not.

The issue is, when it comes to pricing and picking the pockets of customers, dealership shops would dream of the profit margins that most aftermarket have.

Second point - not to be too agressive here, but after three or four consecutive years of record auto sales, if you're having to be the discount leader in your market area to attract the bottom tier of customers then something isn't right in Dodge ... value isn't who has the cheapest price.

Bravo, Rob! Very well said as usual!!