rental car expense-where to charge?

[FJFXDOPS]

btk,
Our rentals and loaners go to account 52 "Alternate Transportation" on our financial statement. We do not discriminate with regards to who gets a vehicle to use, our Dealer's policy is "If they ask for transportation, provide it, regardless of where or when they purchased their vehicle".
As a result, our expense exceeds $150,000.00 a month, or about 6% of total dealership gross. We split this 80/20 Fixed over Variable op's (and we wonder why it is so difficult to produce a reasonable return on the Dealer's investment in Service Dept!). This philosophy was initiated by MB-USA and we just took it to the next level. Prior to the Altrans account, we took rentals to policy.
If there are any other MB guy's out there, I would be interested in knowing how you qualify your Client's as to who gets a vehicle to drive.

[Art_Mopar]

Maybe I'm wrong but isn't ANY charge off of Gross Profit a cost of sale? Advertising, training, policy, supplies,tools,laundry and etc. are all Costs of Sale. Remember guys we have Sales, Gross Profit,and Net Profit.

[texaslp]

There is a difference.

There is "cost of sale" which is a shortened form of "cost of goods sold".
The direct cost of the "item" being sold.

Expenses are indirect and may be referred to as "cost of doing business". Most expenses don't depend on making a sale.

[69mach1]

do you charge any of the rental to parts, just because you try to save a job why should service expense it does not your parts department make anything of the repair

[Old Irish]

I don't, simply because parts is profiting less from the job....and, after all, it wasn't *their* decision to give away a rental.

Now, if a parts department *mistake* results in a rental bill, I expec them to pony up

Cheers
DD