Warranty Oil Change Rant

Re: Warranty Oil Change Rant

Postby franks283 » Tue Jun 23, 2015 5:53 pm

I will answer it, MR2048. I work at several dealers. One, I have parts adjust the parts, and I change the labor sale amount. So, if the oil change cost $25 bucks, and the factory reimburses $20, we have a negative labor sale.

Another dealer, they close out wrong, for, say $38.00, and if they pay $20, I write $9 off to parts, $9 off to service. 50/50 split.

I also dislike the oil change programs. At the one dealer that I do the split, I encourage the service advisors to sell ones that pay more than the minimum. I work for Chrysler dealers, and the loser plans are Essential Care plans. I try to have them sell the ones that pay more.
The worst is diesel plans. We really take losses on those.


The bad thing is that two of my dealers sell the s$%*t out of them. And are encouraged to do so. It keeps me, as an administrator busy, and a a lot of the people that come in get oilchanges only.

Dealers need to come together and confront the factory on these loser plans, to delete them altogether. Oh, one thing that hasn't been mentioned. Service managers encourage selling the plans because they get kickbacks from the factory. Like trips to nice locations(Orlando, FL, Hawaii) and if they don't want that, they can cash out.
franks283
 
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Re: Warranty Oil Change Rant

Postby Richard » Thu Jun 25, 2015 11:01 pm

franks283 wrote:

Dealers need to come together and confront the factory on these loser plans, to delete them altogether. Oh, one thing that hasn't been mentioned. Service managers encourage selling the plans because they get kickbacks from the factory. Like trips to nice locations(Orlando, FL, Hawaii) and if they don't want that, they can cash out.


You'll never get the dealers to band together for anything, they are too scared that they might lose the franchise. They can keep the trips, I'll NEVER go on another GM trip.
Richard
 
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Re: Warranty Oil Change Rant

Postby FixedManager » Fri Jun 26, 2015 12:32 am

This has become quite interesting. Even though I only received one response to my question the tangent it has taken is helping me (and I hope others). BTK is right, the bottom line is going to be the same no matter where you put the numbers. I have three problems with adjusting the numbers:

1) It gives me bad data on all of my reports, statements, and GL accounts. Bad data creates bad decisions.
2) With false profitability I will be paying employees on money not earned.
3) The opportunity for questions regarding the low profitability from the Owner, General Manager, CEO, CFO to address this issue is removed.


On another note, this is one that I don't understand:
franks283 wrote:Another dealer, they close out wrong, for, say $38.00, and if they pay $20, I write $9 off to parts, $9 off to service. 50/50 split.

I have been to many dealerships that practice this form of write-off. I have always changed it to a more equitable split by calculating the profit margins of the departments. For those of you who feel an even split down the middle is fair do you realize that on average the Parts department makes 33% on every dollar while Service is at 71% ? I prefer to treat my Parts and Service Managers with respect and 50-50 is not fair in this situation.
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Re: Warranty Oil Change Rant

Postby Richard » Fri Jul 03, 2015 2:59 pm

FixedManager wrote:This has become quite interesting. Even though I only received one response to my question the tangent it has taken is helping me (and I hope others). BTK is right, the bottom line is going to be the same no matter where you put the numbers. I have three problems with adjusting the numbers:

1) It gives me bad data on all of my reports, statements, and GL accounts. Bad data creates bad decisions.
2) With false profitability I will be paying employees on money not earned.
3) The opportunity for questions regarding the low profitability from the Owner, General Manager, CEO, CFO to address this issue is removed.


On another note, this is one that I don't understand:
franks283 wrote:Another dealer, they close out wrong, for, say $38.00, and if they pay $20, I write $9 off to parts, $9 off to service. 50/50 split.

I have been to many dealerships that practice this form of write-off. I have always changed it to a more equitable split by calculating the profit margins of the departments. For those of you who feel an even split down the middle is fair do you realize that on average the Parts department makes 33% on every dollar while Service is at 71% ? I prefer to treat my Parts and Service Managers with respect and 50-50 is not fair in this situation.


Finally, a fixed ops manager that has a clue!
Richard
 
Posts: 497
Joined: Mon Mar 08, 1999 12:00 am

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