Customer's buying their own parts

[TheTrustedMechanic]

@dfrisby I agree 100%.  In your situation, with this customer, I probably would have done exactly the same.

[CAR_AutoReports]

20 hours ago, ScottSpec said:

Car,

You are correct that you can refuse service to anyone you choose, and warranty different types of parts for different periods of time, but you are incorrect about the law not being able to dictate how long you warranty something. See https://www.montgomerycountymd.gov/OCP/Resources/Files/Licensing_Forms/Auto_Repair_Shop Introductory Letter.pdf It specifically states "Maryland law does not allow implied warranties to be disclaimed or limited in any sale of goods or service to a consumer, so an invoice you give to a consumer should not contain language like “seller disclaims all warranties.”

Another example of the law dictating warranties, is the lemon law. https://www.peoples-law.org/marylands-lemon-law The law forces a manufacturer or dealer to purchase back a vehicle. In Maryland, they get one chance to fix a safety related problem before you are entitled to a refund, or replacement vehicle.  

We all take risks every day. It's part of being in business. The main point I want to get across is that every shop owner should make sure they fully understand the risks of installing a customer supplied part. I think a lot are under mistaken, or misunderstood beliefs. Just like you with regards to the law and warranties. Some believe their insurance will cover them. Mine will cover up to $2500 in liability. Some believe a disclaimer, or release of liability will protect them. This has been proven over and over to provide little to no protection. I actually just lost a court case earlier this year despite the customer signing a disclaimer. We didn't install their part, but we did replace a Cam Position sensor at their request. We stated on the invoice that we were unable to reproduce her symptoms, and that we replaced the sensor based on her request. Then when it didn't fix her problem, she decided we did an unnecessary repair. The judge sided with her as we are the professionals. Some believe that a customer will appreciate your installing their part, and would never try to hold you responsible. People's attitudes and approaches can change pretty quickly when things don't work out as expected.  

Scott

 

Scott,

 

You forgot the front half of that statement that starts with" In addition to express warranties, there are implied warranties. In Maryland, whenever you sell a part to a consumer – even a used one – there is an implied (unstated) warranty that it is fit for ordinary use and will last a reasonable length of time. "

So what exactly is an implied warranty and what is the reasonable length of time?  Seems like something that is designed to allow the court to use their own discretion to determine what is fair and what is not.  Which basically means... when it's up to courts to decide your fate.... you should always prepare to be on the losing end of each equation.

You're also citing state law, not federal law.  Which would vary greatly from state to state.

Based on the numerous attorneys we've had speak to us... we're basically told that anything you put on that vehicle is explicitly your responsibility.  Thus why we don't make it common practice to install customer parts.

It seems like that really vague law in Marylands books is designed to help customers pull frivolous claims against a shop.  So maybe you should reach out to your representatives and speak to them about the problems and loopholes left in that law.  Because what happens when you buy something from a junk yard that comes with a 90 day warranty and it blows up 180 days later.  Are you still forced to warranty it for longer than the warranty was granted to you?

A lot more questions left to ask than answered here.  In addition to that fact that if we can't replicate a problem, we've learned that it's likely not a sensor problem and we rarely replace sensors with intermittent issues we would even be less likely to replace them "at a customer request".  Even more so now after reading your post.

I would rather diagnose, document my diagnosis, get paid for what I did and let the customer that is trying to dictate their terms... do so elsewhere.

Also, I was clearly wrong in stating that the law can't tell you how long to warranty items.  Which is ok, now I've learned and now I have my own homework to do.

Ricardo

 

[CAR_AutoReports]

19 hours ago, TheTrustedMechanic said:

@dfrisby You can always find a reason to install customer supplied parts and examples of how it works out.  But in the end, it is nothing but a problem. 

What if this customer, after you installed the hood release cable and then quoted the other work, he asked to buy those parts and have you install them too?  Where does it end?  When I first opened I thought I would win customers by agreeing to install their parts the first time.  I can't remember the only customer who converted from parts supplied to parts buyer. 

With that said, I will install certain parts for certain customers, such as the one who wanted a back-up camera and monitor that was a gift from a family member or the fellow with the 1960 Thunderbird that needs a wiper switch that he has already purchased.  But the person who calls up and asks, "How much to install tie rod ends?  I already bought the parts." is a BIG no!

We really have the same approach.

I can count on one hand the customers we install supplied parts for.  Even then... that already tiny list is dwindling down.  We make very few exceptions and none of them are for new customers.

[CAR_AutoReports]

To provide real world numbers for this discussion... our sales this year compared on a Jan 1 to Oct 21 date range in 2018 vs 2019.

Total revenue is up 35% compared to YoY.  As of right now, I'm over 2018's numbers as of last month.

Our average ticket is hovering around $600, even though last month, credit card sales averaged $780 per ticket.

We do 0 mailers.

We have tried to implement a "special" to draw customers in, but it fell flat.  We are trying it again this winter to see what happens, albeit with a different advertising and marketing approach.

We have raised our labor rate this year, but our costs have also risen due to hiring one permanent employee and we had a part time employee with us for several months that recently left.

If I stripped away all of the variables that may have caused for a "rougher" year last year in addition to the revenue generators we added this year (ADAS)... I'm pretty sure we'd still be well over 10%+ YoY growth.

My advertising budget grew from last year to this year, but it's still a rounding error considering what I know some places spend on advertising.  While my advertising is really effective and has drawn in over 10 new customers a month most months, I attribute A LOT of our success to "building" over the last 7 years and now we are finally seeing the fruits of all of our hard work paying off.

[dfrisby]

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[samgoto96]

2 hours ago, dfrisby said:

We are up 26% year to date in gross sales, which is great after 3 years being fairly flat. The number on my books I find surprising is we are up 81% Net Income. We eliminated a salary service writer that wasn't pulling his weight. My wife filled in part time there, and I put in a few more hours keeping up with the work orders. and after a year we replaced that service writer with one that is on hourly plus a commission. I'll never have an employee on salary again, and there will always be at least a portion of their pay based on our sales. Amazing the difference a pay structure with incentives does for employees.

 

 Our employees have all been on a flat hourly rate. How do you deal with the techs on hourly plus incentive? I am interested in hearing opinions on this topic. I always thought that the base hourly rate with incentive somehow worked in would always increase workflow / productivity. The only issue that I see is how do you deal with warranty work?

[dfrisby]

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[ScottSpec]

2 hours ago, CAR_AutoReports said:

Scott,

 

You forgot the front half of that statement that starts with" In addition to express warranties, there are implied warranties. In Maryland, whenever you sell a part to a consumer – even a used one – there is an implied (unstated) warranty that it is fit for ordinary use and will last a reasonable length of time. "

So what exactly is an implied warranty and what is the reasonable length of time?  Seems like something that is designed to allow the court to use their own discretion to determine what is fair and what is not.  Which basically means... when it's up to courts to decide your fate.... you should always prepare to be on the losing end of each equation.

You're also citing state law, not federal law.  Which would vary greatly from state to state.

Based on the numerous attorneys we've had speak to us... we're basically told that anything you put on that vehicle is explicitly your responsibility.  Thus why we don't make it common practice to install customer parts.

It seems like that really vague law in Marylands books is designed to help customers pull frivolous claims against a shop.  So maybe you should reach out to your representatives and speak to them about the problems and loopholes left in that law.  Because what happens when you buy something from a junk yard that comes with a 90 day warranty and it blows up 180 days later.  Are you still forced to warranty it for longer than the warranty was granted to you?

A lot more questions left to ask than answered here.  In addition to that fact that if we can't replicate a problem, we've learned that it's likely not a sensor problem and we rarely replace sensors with intermittent issues we would even be less likely to replace them "at a customer request".  Even more so now after reading your post.

I would rather diagnose, document my diagnosis, get paid for what I did and let the customer that is trying to dictate their terms... do so elsewhere.

Also, I was clearly wrong in stating that the law can't tell you how long to warranty items.  Which is ok, now I've learned and now I have my own homework to do.

Ricardo

 

Ricardo,

The part I shared from that article was just to shed some light on the role law has on dictating warranties, and the fact that you can't just write a disclaimer on the invoice and think you have no liability. I'm sure if we dig through Maryland's consumer laws, we will find a more in depth explanation, that is if we don't fall asleep first.  An implied warranty is essentially what a consumer can reasonably expect (yes, pretty vague, and I'm sure is different for everyone). There is a pretty good description here: https://consumer.findlaw.com/consumer-transactions/what-is-an-implied-warranty-.html

With your regard to the what if on the junk yard motor, from what I have read, you just have to pass along the same warranty the provider of the part offers. So regardless of new, used, rebuilt, or other, you just have to extent the same to your customer. You can't use any disclaimer to change that. This of course is Maryland law, which is where I am located. My understanding is that the same would apply to a customer supplied part. So if you bought a used engine from a salvage yard with a 3 month warranty, you would have to provide the same 3 month warranty to the customer if they bought it themselves at the the same salvage yard.  

It sounds like you and I have come to the same conclusion though, and that is we are ultimately responsible for any work we do on a customer's car. If we use our supplied parts, or we use their supplied parts. And while the laws are a bit vague, as you say, I don't think that really matters much any more, because if there is a problem, it will always come back to the fact that you and I are the professionals. Customer's are allowed to be ignorant, but we aren't. It reminds me of NTSB airplane crash investigations. I don't fly anymore, but I used to. One of the guys I work with is also big into aviation and we used to fly together a lot. We joke around about this quite often, and that is the fact that the NTSB almost always sites pilot error when a small plane crashes. Wing falls off, "pilot error" engine grenades "pilot error"  bird strikes "pilot error". As I say it is pretty comical at times. My point is that it we will always shoulder the responsibility.

We very rarely install a part without doing the diagnostic work first. But when a customer has a stalling, not starting, or some other serious issue, and we cannot find the cause because we are unable to reproduce. then we don't object to trying something if the customer wants. That is as long as they fully understand that is essentially a guess, and a way to eliminate a possibility.

Scott

   

 

 

[CAR_AutoReports]

10 hours ago, samgoto96 said:

 Our employees have all been on a flat hourly rate. How do you deal with the techs on hourly plus incentive? I am interested in hearing opinions on this topic. I always thought that the base hourly rate with incentive somehow worked in would always increase workflow / productivity. The only issue that I see is how do you deal with warranty work?

This is such a double edged sword.  I can definitely see it's value after some of the discussions we have here.

But I just don't see it as a fit for what we do here and how we do it. 

My guys give 100% nearly every day and changing the dynamic would change the culture we've worked so hard to build.

I also feel like there is incentive to oversell and see how much they "can get away with" in an effort to make money.  Which is the complete opposite of what we do here.  We explicitly don't sell and if you I catch you selling something someone doesn't need or worse yet, selling someone on undue fear... It's grounds for dismissal.

I got my guys to do exactly what I need them to, just by talking to them.  They are appreciative of the respect we all have for each other and the team approach to what we do.  It makes it challenging to find people to fit into our mold when hiring, but I don't know anyone who easily hires employees.

[CAR_AutoReports]

9 hours ago, ScottSpec said:

Ricardo,

The part I shared from that article was just to shed some light on the role law has on dictating warranties, and the fact that you can't just write a disclaimer on the invoice and think you have no liability. I'm sure if we dig through Maryland's consumer laws, we will find a more in depth explanation, that is if we don't fall asleep first.  An implied warranty is essentially what a consumer can reasonably expect (yes, pretty vague, and I'm sure is different for everyone). There is a pretty good description here: https://consumer.findlaw.com/consumer-transactions/what-is-an-implied-warranty-.html

With your regard to the what if on the junk yard motor, from what I have read, you just have to pass along the same warranty the provider of the part offers. So regardless of new, used, rebuilt, or other, you just have to extent the same to your customer. You can't use any disclaimer to change that. This of course is Maryland law, which is where I am located. My understanding is that the same would apply to a customer supplied part. So if you bought a used engine from a salvage yard with a 3 month warranty, you would have to provide the same 3 month warranty to the customer if they bought it themselves at the the same salvage yard.  

It sounds like you and I have come to the same conclusion though, and that is we are ultimately responsible for any work we do on a customer's car. If we use our supplied parts, or we use their supplied parts. And while the laws are a bit vague, as you say, I don't think that really matters much any more, because if there is a problem, it will always come back to the fact that you and I are the professionals. Customer's are allowed to be ignorant, but we aren't. It reminds me of NTSB airplane crash investigations. I don't fly anymore, but I used to. One of the guys I work with is also big into aviation and we used to fly together a lot. We joke around about this quite often, and that is the fact that the NTSB almost always sites pilot error when a small plane crashes. Wing falls off, "pilot error" engine grenades "pilot error"  bird strikes "pilot error". As I say it is pretty comical at times. My point is that it we will always shoulder the responsibility.

We very rarely install a part without doing the diagnostic work first. But when a customer has a stalling, not starting, or some other serious issue, and we cannot find the cause because we are unable to reproduce. then we don't object to trying something if the customer wants. That is as long as they fully understand that is essentially a guess, and a way to eliminate a possibility.

Scott

   

 

 

Scott,

A lot of insight in your post, as usual.

I think the one thing that worries me is, when a junk yard will give someone a different warranty than they will give you.  We've seen it happen, we call up and get a 30 day warranty.  Customer or another shop calls up 1-2 days later and gets the same price (sometimes even cheaper with the same sales rep) with a better warranty offered to them.

The law is assuming that all business is conducted above board and with standards... when this industry is far from that, especially with second hand parts. 

Sh*tty scenarios that constantly have us adjusting and sometimes making harsh decisions just to protect ourselves.

It's really just a sad state of affairs that we have to be the adults to protect other adults from themselves. 

 

I recently had a scenario where someone brought me a 1997 F Super Duty to have the brakes checked.  The driver that dropped it off, noted several other concerns that made him feel unsafe.  The standard procedure here is, new customer.... full inspection from bumper to bumper. Which we did and uncovered several unsafe items in addition to the other items that the owner had mentioned.  His total estimate was around $6,000 for a really neglected vehicle. 

He wasn't interested in fixing anything, he wanted to have working brakes, so I should just "put pads and rotors on the truck and lower my price significantly."

This guy flipped his lid and insisted he was right and I had to do what he wanted to do, because he would assume all liability anyway.  I tried to get him to understand that it doesn't work like that... and this is a guy who owns a business in town.

He eventually found a butcher to do things his way and made sure to reach out and throw it in my face that he got what he wanted at this other shop and I was just trying to rip him off.  This individual went as far as threatening me with bad reviews because we charged him for our full inspection and estimate.  He has since pretty much told anyone he can in town that I was trying to rip him off, essentially trying to tarnish the reputation I have spent over a decade to build.

Our technician has 2 hours and 8 minutes of time into his inspection, he left that disaster of a vehicle on my property for nearly 4 days (it filled our entire warehouse with smoke when trying to start it) and it took us well over 2 hours to find correct parts, part numbers and sources for these parts.  An estimate that he brings to the butcher... which orders all of the parts that we told him were for the vehicle... and looks like a hero for doing what the owner wanted.

But I've gotten used to being the bad guy.  My business.  My insurance policy.  My rules.

The moral here?  I got paid for my time.  Probably not enough to deal with the aggravation this guy caused... But we provided an exemplary service and we got paid for it.

 

Ricardo

[ScottSpec]

2 hours ago, CAR_AutoReports said:

This is such a double edged sword.  I can definitely see it's value after some of the discussions we have here.

But I just don't see it as a fit for what we do here and how we do it. 

My guys give 100% nearly every day and changing the dynamic would change the culture we've worked so hard to build.

I also feel like there is incentive to oversell and see how much they "can get away with" in an effort to make money.  Which is the complete opposite of what we do here.  We explicitly don't sell and if you I catch you selling something someone doesn't need or worse yet, selling someone on undue fear... It's grounds for dismissal.

I got my guys to do exactly what I need them to, just by talking to them.  They are appreciative of the respect we all have for each other and the team approach to what we do.  It makes it challenging to find people to fit into our mold when hiring, but I don't know anyone who easily hires employees.

This may not make me the most popular here, but I get so tired of hearing shop owners complain that they can't find good techs, and that the industry is facing a tech shortage, or that the ones they hired turned out to be crooks selling unnecessary work, and then go on to talk about how all their techs are on commission, and if they don't work, they don't eat. Wow, that sounds so appealing. I can't understand why people aren't knocking down the door to take advantage of that opportunity, and why techs sell unnecessary work. This industry does not have a tech shortage, this industry has a technician pay structure, and technician pay shortage. If technicians started getting paid, and provided benefits that were inline with what they could earn with their skills in other industries, there would be many more reputable technicians. 

Now, my comment above is not to blame those shop owners, as we are all struggling with the high cost of providing automotive and trying to make a profit. I just want some honesty about the reality of the issue. It's an industry problem. Customers are only willing to pay so much, and there is almost always someone out there that is willing to do it cheaper. Yes, we can sell them on the value of our shop over the guy down the street, but that only goes so far. 

I pay all my employees a flat salary plus a commission on the gross sales of the shop. Yes, this can be painful during slow times, but my employees don't have to worry that they might not eat this week, or be able to pay their mortgages. It's amazing how much more productive and committed employees are when they are not living with that fear. I can go away for weeks at a time, and when I come back ,it is no different then when I left it. With the commission component, they also know that the more the shop produces as a whole, the bigger their paycheck is. This also encourages them to work as a team, and not fight over the "gravy" tickets. I currently have 4 employees. The first tech I hired 30 years ago is still here. The service manager I hired 20 years ago is still here. The technician I hired 11 years ago is still here, and I hired a young guy about a year and a half ago and I don't think he will be leaving anything soon. In fact, while I have fired a few techs, I don't recall ever having one quit. I also offer paid time off, a 401k, and pay portion of their health insurance. I used to cover the whole amount, but it got too expensive.

Now, you may be curious about how much they get paid. I don't want to give specifics, but I assure you that they can all make more money working some place else. I know for a fact one of them could be making twice as much as I pay him because a friend of mine is doing just that at a shop around the corner, and he works shorter hours. I understand that this pay structure may not work for a lot of shops out there, but it does illustrate my point that a more traditional employee pay structure, one that they don't have to worry about being able to eat or not, or have to sell unnecessary work to eat, does breed commitment, motivation, and teamwork.

Scott

 

 

  

  

[CAR_AutoReports]

3 minutes ago, ScottSpec said:

This may not make me the most popular here, but I get so tired of hearing shop owners complain that they can't find good techs, and that the industry is facing a tech shortage, or that the ones they hired turned out to be crooks selling unnecessary work, and then go on to talk about how all their techs are on commission, and if they don't work, they don't eat. Wow, that sounds so appealing. I can't understand why people aren't knocking down the door to take advantage of that opportunity, and why techs sell unnecessary work. This industry does not have a tech shortage, this industry has a technician pay structure, and technician pay shortage. If technicians started getting paid, and provided benefits that were inline with what they could earn with their skills in other industries, there would be many more reputable technicians. 

Now, my comment above is not to blame those shop owners, as we are all struggling with the high cost of providing automotive and trying to make a profit. I just want some honesty about the reality of the issue. It's an industry problem. Customers are only willing to pay so much, and there is almost always someone out there that is willing to do it cheaper. Yes, we can sell them on the value of our shop over the guy down the street, but that only goes so far. 

I pay all my employees a flat salary plus a commission on the gross sales of the shop. Yes, this can be painful during slow times, but my employees don't have to worry that they might not eat this week, or be able to pay their mortgages. It's amazing how much more productive and committed employees are when they are not living with that fear. I can go away for weeks at a time, and when I come back ,it is no different then when I left it. With the commission component, they also know that the more the shop produces as a whole, the bigger their paycheck is. This also encourages them to work as a team, and not fight over the "gravy" tickets. I currently have 4 employees. The first tech I hired 30 years ago is still here. The service manager I hired 20 years ago is still here. The technician I hired 11 years ago is still here, and I hired a young guy about a year and a half ago and I don't think he will be leaving anything soon. In fact, while I have fired a few techs, I don't recall ever having one quit. I also offer paid time off, a 401k, and pay portion of their health insurance. I used to cover the whole amount, but it got too expensive.

Now, you may be curious about how much they get paid. I don't want to give specifics, but I assure you that they can all make more money working some place else. I know for a fact one of them could be making twice as much as I pay him because a friend of mine is doing just that at a shop around the corner, and he works shorter hours. I understand that this pay structure may not work for a lot of shops out there, but it does illustrate my point that a more traditional employee pay structure, one that they don't have to worry about being able to eat or not, or have to sell unnecessary work to eat, does breed commitment, motivation, and teamwork.

Scott

 

 

  

  

Scott,

We're more alike than each of us probably realizes.

Everything you wrote up there is close to what we do here.  No 401K at the moment and we are working on the health insurance initiatives... but very similar in everything else.  From being able to go on vacation and having them actually do more... to having them know they can make more money elsewhere and won't leave.

Team building is the most critical element for any business to survive.

Ricardo

[ScottSpec]

9 minutes ago, CAR_AutoReports said:

Scott,

We're more alike than each of us probably realizes.

Everything you wrote up there is close to what we do here.  No 401K at the moment and we are working on the health insurance initiatives... but very similar in everything else.  From being able to go on vacation and having them actually do more... to having them know they can make more money elsewhere and won't leave.

Team building is the most critical element for any business to survive.

Ricardo

Ricardo,

I believe you and I have exchanged a number of thoughts over a period of time, and I always thought our philosophies were similar. I hope I didn't come across as adversarial. 

Scott

 

 

[CAR_AutoReports]

14 minutes ago, ScottSpec said:

Ricardo,

I believe you and I have exchanged a number of thoughts over a period of time, and I always thought our philosophies were similar. I hope I didn't come across as adversarial. 

Scott

 

 

Not in the least.  Really intrigued by your tenacity to jump into different areas of the business and execute.

[dfrisby]

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[DUFRESNES]

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