DealersEdge Professional Forums

Anyone out there have a dealership where you have "leased out" your body shop to an existing company? I have an under-performing shop and not sure which route we may go, hire another manager or lease the facility out. If you have, how has it worked out for you?

Thanks!

We lease ours out and it has worked very well. They buy all their GM parts from us and do all of our body work.

thanks... do you know the arrangements of the lease? do they also pay you a % of their gross or net profit? I assume they are not on your dealership's payroll at all, just leasing?

thanks!!

Monthly rent only.

I have been to a number of dealers that lease out space to an independant Body Shop, not usually because they have a body shop that is underperforming, but usually because they have the unused space and dont already have a body shop.

If the Parts Dept, Used Vehicle Dept or the Service Department was underperforming, is it an option to lease out that space??!!??

Since you have the space and a staff that is underperforming, why consider letting all of those employees go and abandoning that department altogether? If someone else can be profitable in that space, than you can too!

I am sure that this may vary by state, but at least in Ohio, the fees, licensing, inspections, safety & environmental compliances, etc. are more stringent (and more expensive) for a dealer-operated body shop than for an independent. That factor alone has pushed some dealers in this state to go "sublet" route.

The headaches of running a body shop are not worth it.

I beg to differ. We have an underperforming body shop, and just recently replace the manager. Well let me tell you it made a world of difference in the first month. A properly run body shop is a great gross generator. Why would anybody in these times let someone come in and use their facilty and only receive a rent factor and some gross on parts? Why not keep it all for yourselves? this is a great time to be in the body shop business.

Z28

x 2

......the only reason a dealer owned body shop looks like it loses money is because of the expense structure the dealer has designated or poor management.

z28 - x3 - you hit it right on the head. It is all about the manager. Get the right guy/gal in there and you will be profitable.