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PARTS WARRANTY

steve

By steve
in Workflow, Procedures, Shop Forms

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autoguy Rising Star

autoguy

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HELLO ALL

MY NAME IS STEVE , THIS IS MY FIRST DAY AT SCHOOL. SO DONT HARASS ME, I WILL TELL MY MOM.

WHAT DOES EVERYONE DO ABOUT WARRANTY , LABOR, HOW LONG DO YOU WARRANTY, AND DO YOU TRACK IT.

WE ARE A NAPA AUTO CARE CENTER, SEAMS LIKE WARRANTYS HAVE WENT UP, NAPA ONLY COVERS PART AND 75% LABOR, HAVE THOUGHT ABOUT DOING OWN INTERNAL EXTENDED WARRANTY, ANYONE DO THAT?

STEVE

 

 

Hi Steve! We go by a 12 month/12.000 mile warranty as a norm.

 

How do you like the NAPA program, do you find that it is helpful? What do you get out of it?

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

Posted
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HELLO ALL

MY NAME IS STEVE , THIS IS MY FIRST DAY AT SCHOOL. SO DONT HARASS ME, I WILL TELL MY MOM.

WHAT DOES EVERYONE DO ABOUT WARRANTY , LABOR, HOW LONG DO YOU WARRANTY, AND DO YOU TRACK IT.

WE ARE A NAPA AUTO CARE CENTER, SEAMS LIKE WARRANTYS HAVE WENT UP, NAPA ONLY COVERS PART AND 75% LABOR, HAVE THOUGHT ABOUT DOING OWN INTERNAL EXTENDED WARRANTY, ANYONE DO THAT?

STEVE

 

The most common warranties we offer are either 12/12 or 2/24. We are using them more and more as a way to offer different price options to the customers.

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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So you sell a job with 2/24, at higher price? How do you structure your pricing?

 

Great question. The answer in our case is: "As needed to make the sale."

 

The days of fixed pricing for all services are gone for us.

 

A shop with a stuck tech is no different than a hotel with an empty room. Once the day is gone, that time/room is gone forever.

 

We do what we need to do to fill the room for the night. Today in Michigan if you want to survive you will learn to play hardball...or you will not be in the show for very long. Undercutting competitors has become part of normal day to day operations. We expect this in the hotel industry, but conventional wisdom scoffs at it in our industry...for no logical reason.

 

Adjust the warranty, adjust the price, adjust what is included, adjust the part, etc.

 

If you walk in my front door wanting a deal on a timing belt when I have 2 stuck techs odds are you are going to get a heck of a deal compared to when we are backed up with good jobs.

 

Dynamic pricing can be a great addition to your service advisor's tool box.

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Alex

Alex

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As part of TECH-NET we warranty our work nationwide, parts/labor for 12,000 miles/12 months. Sonsio is the company that pays the claims. It works well and it gives cusotmers peace of mind for those that do a lot of traveling. The warranty applies to customers who travel farther than 25 miles from your shop. Without TECH-NET there would be a monthly fee for the program, but it's part of the yearly enrollment fee.

 

Joe is talking about this:

 

tnpNationwideWarranty.jpg

 

http://www.technetprofessional.com/

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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Tom, I totally agree with that once labor time is lost, it’s lost forever, and that selling something is better than selling nothing. But, are you setting the stage for the constant “let’s make a deal" atmosphere? Survival is one thing, but is this what has happened to our industry? Are there any ways to increase business? Or has the business changed that much?

 

Trust me…I am not judging. I am asking questions. More and more shop owners feel the same way you do.

 

Joe:

 

It's just one more tool in the advisor's tool box to be used when appropriate not unlike so many other industries.

 

Things are a bit different here in Michigan as it has been established numerically that we have been in a one state recession....we started sinking back in 2000 and have never recovered, instead it has progressively become worse each year. 68% of all residential moves here are out of state. We have led the nation in unemployment for years. Many of our counties lead the country in foreclosures....30-40% of them being negative equity forelosures due to collapsing real estate prices.

 

So, we got creative. Lately, GP is up, car count is up, net is up...a lot of this due to new "tactics".

 

Plus, the business is indeed changing. Competition is getting far more sophisticated and will continue to increase.

 

As these things spread beyond the borders of Michigan (already happening from the numbers that I have seen around the country) there will be many sleepless nights for shop owners who think we are nuts to do the things that we do here. They will either see the light or get out...probably the latter for many who just won't accept the changes.

 

If you really want to learn a lot about shop management, come on over to Michigan and give it a try...it could be quite enlightening. ;)

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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I agree with you that many parts of the country are in the same boat, and it will take innovative moves to stay alive in the future.

 

Is there a light at the end of the tunnel? Or is the light another train coming our way?

 

It will likely require more innovation that many are anticipating.

 

The train is coming your way.

 

Key numbers are what shops should currently be looking at, placing costs at the top of the list.

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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Where do you see our industry headed? What types of services and repairs will we be seeing in the future?

 

Based on what you see, what does the typical shop need to do in order to saty alive? You mentioned tracking ket numbers and watching costs. In the end, a shop needs income, whcich is driven by sales.

 

Your thoughts?

 

Where the industry is headed at this time looks like it will be primarily driven by the economy. What are the indicators in your area? What do you believe will happen to the U.S. economy over the next year or so?

 

If it worsens significantly, shops will be on ground that has not been seen in this country in many years. Maintenance services will decrease, repairs will increase...and many of the repairs will be things that today we consider unacceptable. Fixing parts instead of replacing them. Used parts could become huge.

 

Net income is primarily driven by the difference between sales and costs, not primarily by sales. There are many shops today who could lose 25% to as much as 75% of their sales while fixing their key numbers and end up with the same or more net and a lot less stress.

 

One needs to first fix the key numbers, then go after sales, but conventional wisdom typically has that backwards.

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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I think you are on the right track Steve. To what market are we trying to attract? The better shops need to postition themselves as pros, not just average. What will set us apart will be the level of service we offer and all the items you mentioned.

 

However, many shop see declining car counts and start to panic.

 

The business is changing and we need to understand what the customer wants and give it to them, but remain profitable. Do more of what is profitable.

 

The key is to adjust to the customer no matter how unconventional a method may seem...and do it in such a way as to maintain decent numbers.

 

I agree with most of the management theories to a point, however if the economy really tanks, all bets are off and many of the management theories will be junk. ;)

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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Has it become more of an issue with the economy the way it is lately or do things seem better???

 

We are making more adjustments and getting more creative in many areas constantly. Overall, it is getting tougher, but so far the changes we are making are working both to retain and increase over 07, although the success is not as great as it was when the stimulus checks were being sent out earlier in the year.

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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Do you think people are relunctant to spend out of fear or becuase they are suffering financially?

 

Yes to both....and there are other reasons, also. Every day that goes by more people are awakening to the increasingly likely possibility that the US economy may collapse. Loss of jobs, homes, investments, and all of their other stuff is becoming more real. The end of the era of economic fun and the beginning of a massive change in how the average person in the US lives.

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allimports Rookie

allimports

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Yes to both....and there are other reasons, also. Every day that goes by more people are awakening to the increasingly likely possibility that the US economy may collapse. Loss of jobs, homes, investments, and all of their other stuff is becoming more real. The end of the era of economic fun and the beginning of a massive change in how the average person in the US lives.

 

I think the commmon consumer is in a state of shock with what they see out there. Fuel and heating oil prices, slumping housing prices, everyday needs such as groceries rising, the failure of large companies needing bail outs, popor ROI within their 401k and private investments.

 

All these things are key indicators for people to do whatever it takes to hold on to their money.

 

The media blows it all up, all the time, all day long. Educating the public on how bad everything is. Would the housing crisis fall as much so fast if teh media wasn;t all over it every day?

 

It will be very interesting to see what happens this winter, some will not be able to afford to heat thei homes.

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Tom Ham AutoMN.info Contributor

Tom Ham AutoMN.info

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I think the commmon consumer is in a state of shock with what they see out there. Fuel and heating oil prices, slumping housing prices, everyday needs such as groceries rising, the failure of large companies needing bail outs, popor ROI within their 401k and private investments.

 

All these things are key indicators for people to do whatever it takes to hold on to their money.

 

The media blows it all up, all the time, all day long. Educating the public on how bad everything is. Would the housing crisis fall as much so fast if teh media wasn;t all over it every day?

 

It will be very interesting to see what happens this winter, some will not be able to afford to heat thei homes.

 

Actually, the media has been and still is under reporting this to the extreme. The math of the economy is far worse than most people realize.

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