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Monday, May 02, 2011

Dealer or Independent: Who Should Service My Car?

Should I, or must I, take my car back to the dealer for service? I can answer the 2nd half of that question easily. No, you do not have to take your car to the dealership’s service department for maintenance or repairs unless the repairs are covered under your car’s warranty. Be advised that the manufacturer has the right to take into consideration how well you maintained your car in accordance with his recommendations spelled out in your owner’s manual when approving warranty repairs. If you do choose an independent service facility, be sure that they perform the maintenance as recommended in your owner’s manual. Also, be sure that you keep a record of that maintenance.

Whether you should is more complicated. The fact that most new car buyers (about 75%) don’t bring their cars back to the dealer for service is a huge problem for all manufacturers and car dealers. It’s a problem for manufacturers because they can lose the parts sales which include oil filters and oil. The profit margin on auto parts is much higher than on the car itself. If you added up the price of all the parts in your car (twenty to thirty thousand), the total would be many times the price you paid for your car. It’s also a problem for dealers. The retail markup on an auto part is at least 40% and your car’s markup is less than half of that. The average dealer makes more money selling parts than he does cars and he also makes more money selling the labor to service and repair cars than he does selling cars. In most dealerships, the new car department loses money or makes relatively little. The parts and service departments are the real money makers. Finally, a customer who does bring his back to the dealer for service is twice as likely to buy his next car from that dealer.

The reasons that car buyers don’t usually bring their cars back to the dealer for service is very simply price and convenience. Independent service facilities and fast-lube shops are more plentiful than dealers and there’s usually one closer. Why drive 20 miles to your dealer for an oil change when there’s a Jiffy Lube around the corner. Prices are usually less at independent service facilities. Independents have lower overheads and usually don’t use factory parts. Non factory parts, often manufactured overseas are usually less expensive than original factory parts. Independents also don’t have to pay their technicians as much as dealers do.
To combat this problem, many manufacturers are offering free maintenance on new cars for two years and even longer. The idea is to get the new car buyer into the habit of coming back to the dealer. The dealer also has the opportunity to sell the free service customer some services that aren’t included in the free maintenance package. Dealers are also offering such things as free oil changes and a very few even offer free tires and batteries as long as the customer has all of her factory recommended service done by him.

I know I still haven’t answered the question of whether you should bring your car back to the dealer. The answer is that it depends on the dealer’s service department. Most car dealers have better trained technicians and more and better diagnostic equipment than the average independent. Furthermore the dealer’s technicians are specialists in his brand of car. A Ford dealer’s technician knows more about Fords than a Chevrolet dealer’s technician and more than the average independent technician. For this reason I usually recommend that you bring your car to a dealer of that brand for more expensive, difficult repairs. A good independent technician can change the oil and rotate and balance the tires on any car. But he can’t always diagnose a transmission problem and, if he could, might not have the specialized tools needed to fix it.

If the dealer of your brand is not price competitive, by all means check out the independent service companies. But, be sure that their technician, sometimes the owner is the technician, has the proper training. He should have certifications in the National Institute for Automotive Service Excellence, ASE. There are ASE certifications for all components of the car, including air-conditioning, engine, and transmission. Ask to see his certification and be sure that it’s up to date. Check the company out with the BBB, the County Office of Consumer Affairs, and the Attorney General’s office. Ask for the names of references from existing customers. Be sure that he is bonded so that in the event you have a claim against him, he has to pay. Find out how long he has been in business.

Two thing to be on the guard against (for both dealers and independents) is the “up-sell” and hidden charges. When you see an ad for a $16.95 oil change, you can be assured that you won’t leave that service department paying only $16.95. The oil change includes a “free inspection” which means the commissioned technician and service advisor will look for anything else that may need maintenance or fixing on your car. Just be sure what they recommend is really needed and the safest way is to take it somewhere else for a second opinion. Also, watch out for that hidden, extra charge at the bottom of your service invoice. It goes by many different names. Some of the most common are Sundry Supplies, Environmental Impact Fee, Hazardous Waste Disposal Fee, and Supplies and Small Tools. This is nothing more than profit to the dealer and is calculated by adding a percent of the total invoice usually five or ten percent. Almost all dealers and Independents add this charge that should be made illegal. My advice is to refuse to pay it and in most cases they will agree to remove it from your bill.

6 comments:

  1. “Also, be sure that you keep a record of that maintenance.” – Agree! Whether you opt to go to an independent company or to your dealer, you should always keep an updated documentation on every repair done to your car. This is to easily track the history of the vehicle whenever it’s needed.

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  2. That question would depend on the situation. There are instances wherein you'll need the service of the dealer instead of an independent one. These are events like MOT (ministry of transport) test and cars under warranties. However, if you think that your car only needs minor repairs, then an independent contractor would fit in. But I would suggest getting a quote first within your local, and see to it that they're skilled and talented on this kind of field.

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  3. Now I am really confused. The I took my mini to the dealership because goodyear said they couldn't get the oil filter cover off to change the filter when I changed my oil. I told the dealership my concerncs with the car when I had them change my oil and filter and told them about goodyear not being able to get the cover off. They as I expected told me the things that were wrong with my vehicle and asked them to prioritize the problems in the order wich they should be addressed. They did this also. Most of the things they told me that were wrong they also told me were no big deal and I didn't really need to worry about them that they would keep an eye on them for me when I brought my car in for service. The one thing that they did say I should fix first even though it wasn't critical yet were the power steering supply and return lines. I asked twice if the price they quoted was for parts and labor both times I was told yes. My parents freaked I went to a dealer and insisted I call around to some independant shops. The independant shops were quoting prices that were 50 to 70% higher than the dealer. I told my parents the dealer may be out of town but that is where I am going. But first I am going to call one more time to ask the dealer if the price he quoted me does include the parts and labor. Because this completely contradicts what everybody says about costs on dealers versus independants. Plus the dealership can change my oil filter when they change the oil. Not sure what goodyears problem was.

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  4. I believe the factors that affect our decision on where should we bring our cars depend on the extent of the problem. Going for the independent auto shop is quite convenient since there's probably one located just nearby, especially when all you need is basic maintenance. Whereas if the main problem concerns the transmission or any other complex part of the vehicle, it is best to bring it to the dealer to make sure the part gets the best service possible.

    Kenny Isbell

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  5. I think the elephant in the room here is that Jiffy Lube uses Pennzoil, which is totally substandard relative to other brands of oil. I never knew this before I dated someone who knew lots of mechanics and did similar work himself. Who knows how many cars I ruined prematurely by going there? Try Valvoline or maybe see what kind Oil Can Henry's uses.

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  6. Regarding Pennzoil, I'm not sure where it would rank in a comparison test with other oils, but it does meet all of the Federal standards required of engine oil. You can check it out at this website of the American Petroleum Institute, http://www.pqiamerica.com/March2013PCMO/pennzoilplt.htm

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