NJ Warranty Mark-up

[Robert a Bamert jr]

LOOKING FOR COMMENTS ABOUT THE NEW 60% GM WARRANTY MARK-UP,AND IS IT TO LITTLE TO LATE,OR GOOD FOR FIXED OPS,BUT NOT OVERALL DEALERSHIP PROFIT

[mbowers]

If you haven't already demanded in writing that GM give you the retail markup on warranty parts, then it is too late to go back and recover the lost $$$.

Going forward, the 60% markup looks like a good compromise. There is a formula for calculating an actual markup, but it is labor intensive and probably not worth the effort.

There is nothing to be gained by not claiming the 60%. All NJ General Motors dealers will be subject to the new vehicle surcharge regardless whether they get the additional warranty money. For most models, the surcharges look pretty modest. Your sales managers should be able to recover easily.

Besides, it won't be long before Ford, DaimlerChrysler, and the imports begin imposing charges on their vehicles as well.

[GreggT67]

I'm not so sure that it wouldn't be worth an attempt to use to RO sampling method to get a higher parts markup.

Let's say a dealer is now going to do $500K gross on warranty parts a year with the 60% markup. (That would be $312,500 before markup) If you can get it up to 65%, you'll end up making an additional $15,625 in profit on the parts. Not a bad profit for putting someone to work on the project for a week.

Now if only someone could develop a report to determine which cluster of 100 RO's would yield the best markup.