[wantmye90]

even if what they do only involves labor and no parts replacement?

My dealer told me that BMW won't pay them for warranty work done unless they replace parts.

Just wondering if anyone else - such as a tech or dealer - knows?

[AndrewAZ]

Generally service and parts are the most profitable part of the dealership...


I cant think of anything that could be done that just uses labor and no parts... Can you provide an example?

[THE JEDI]

Dealers make money. period..Obama 08

[vAnt826]

Originally Posted by AndrewAZ

Generally service and parts are the most profitable part of the dealership...


I cant think of anything that could be done that just uses labor and no parts... Can you provide an example?

Not sure about domestics, but generally all German/Jap dealers make the most money on sales. Which is why most GMs are previous GSMs.

[NaTuReB0Y]

Originally Posted by AndrewAZ

Generally service and parts are the most profitable part of the dealership...


I cant think of anything that could be done that just uses labor and no parts...

Can you provide an example?

I took my car in for Inspection I........they inspected it.....

wasted a whole day....and nothing was done to the car......

[E90330iS]

Originally Posted by NaTuReB0Y

I took my car in for Inspection I........they inspected it.....

wasted a whole day....and nothing was done to the car......

You should be happy! That means everything is healthy on your car! At least, they are not broken yet

[John 070]

Originally Posted by AndrewAZ

Generally service and parts are the most profitable part of the dealership...


I cant think of anything that could be done that just uses labor and no parts... Can you provide an example?

Cust states whining sound, claims water pump is faulty.

Diag: Customer is a whiner, no problem found at this time.

[imolazhp_ci]

if i remember correctly, BMW reimburses the dealer for 80% of the total cost of repair, incl parts and labor. that is why shady dealers will try to inflate prices and work time, because they want to cut down that 20% deficit. BMW must approve all warranty work that is not required through a Recall or a TSB, most things are very simple and get approved in seconds due to the insignificance of the repair. however, some repairs, i.e. subframes on E46's etc. Those were extremely expensive repairs, BMW as well as their franchised dealers want to make sure they are not spending money on a consumers mistake or abuse.

[Design1314]

Yes they do..

[jmonier]

Originally Posted by imolazhp_ci

if i remember correctly, BMW reimburses the dealer for 80% of the total cost of repair, incl parts and labor. that is why shady dealers will try to inflate prices and work time, because they want to cut down that 20% deficit. BMW must approve all warranty work that is not required through a Recall or a TSB, most things are very simple and get approved in seconds due to the insignificance of the repair. however, some repairs, i.e. subframes on E46's etc. Those were extremely expensive repairs, BMW as well as their franchised dealers want to make sure they are not spending money on a consumers mistake or abuse.

It may be 80% of what they would charge a customer (rather than 80% of the actual cost) but you can bet they make money on it.

[Chowbow]

If they didn't make money on it, they wouldn't be in business. Dealerships will get reimbursed by BMW for warranty work, but it's different than a customer paying. Everything comes down to book time, or how long it takes to perform a certain job.

If "the book" says it takes 5 hours to replace a fuel pump, the dealer is going to charge the customer for 5 hours of labor, even if the tech takes 1 hour to replace it.

If BMW is paying for it, then book time is a little less, say 4 hours to replace a fuel pump. The dealer will get reimbursed for 4 hours even if the tech takes 1 hour to replace it. So it's a better deal for the dealer to get you to pay for it because they get an extra hour or two out of the same job, but the shop rate remains the same. They also get to use the extra markup on the parts at retail vs. wholesale pricing.

In general, most techs (and most shops make them) operate at higher than 100% efficiency, meaning they will always take less time to complete a job than the book says. If you aren't operating above 100% as a tech, you're definitely trailing behind your colleagues and your service manager will probably give you a talk as well.

[halB]

Originally Posted by Chowbow

If they didn't make money on it, they wouldn't be in business. Dealerships will get reimbursed by BMW for warranty work, but it's different than a customer paying. Everything comes down to book time, or how long it takes to perform a certain job.

If "the book" says it takes 5 hours to replace a fuel pump, the dealer is going to charge the customer for 5 hours of labor, even if the tech takes 1 hour to replace it.

If BMW is paying for it, then book time is a little less, say 4 hours to replace a fuel pump. The dealer will get reimbursed for 4 hours even if the tech takes 1 hour to replace it. So it's a better deal for the dealer to get you to pay for it because they get an extra hour or two out of the same job, but the shop rate remains the same. They also get to use the extra markup on the parts at retail vs. wholesale pricing.

In general, most techs (and most shops make them) operate at higher than 100% efficiency, meaning they will always take less time to complete a job than the book says. If you aren't operating above 100% as a tech, you're definitely trailing behind your colleagues and your service manager will probably give you a talk as well.

+1 They bill by the book to maximize billing. They may make (i.e. cheat) a little bit less with warranty work but they can more than make that up by replacing items that are not totally worn. Real life example: When I had a new Ford (don't flame me, that was almost 20 years ago) a long while back I had the tie rod ends replaced under warranty no less than twice per side during the warranty period. Each time I drop the car off for schedule maintenance they always found some parts worn and replaced them, and they did that without even asking me. When I pick up the car the bill was always a mile long and have "warranty" typed behind each entry. They basically milk the manufacturer to death IMO.

Another great thing about billing by the book is that they don't always give allowance for jobs that involve overlapping procedures. I have seen dealers bill labour charges seperately for replacing fan belts and timing belt at the same time, even though they had to take off the fan belts regardless in order to gain access to the timing belt so replacing the fan belts should have incurred only parts charges.

[F32Fleet]

Here's how it works, or so I've been told. BMWNA has a predetermined re-imburesment rate for performing "X" repair. I've been told that this rate is BELOW the going shop rate for someone who walks in the door for the same repair but not under warranty.

Basically, from a tech perspective, they don't like doing warranty work because they're only going to make X dollars no matter how long it takes the tech to complete the work. This sometimes causes problems since the tech may rush, and miss something so he can move on to another vehicle which is a "full price" repair.

I'm sure some Tech's could chime in on this.

[Chowbow]

Without question, techs would rather have customer pay work rather than BMW pay work, because they get more book time. However, some techs are paid hourly regardless of book time. Meaning they get paid 8 hours for working 8 hours, even if they performed 12 hours of book time in those 8 hours. Depends on the shop, and it goes both ways.

[John 070]

We all know cars are shady, but many other things are too...insurance, financial advisors, mortgage brokers, lawyers, doctors, etc. I'd like to think it's the organization, and not the person, though the person seems to be powerless. What does a good doctor who wants the save the world do in today's day and age, when they're stuck dealing with formularies and HMO's? Nobody goes through school thinking I can't wait to get out so I can rip people off left and right. That happens after a few years of experience are under one's belt, after real life on the Street.

[wantmye90]

Originally Posted by AndrewAZ

Generally service and parts are the most profitable part of the dealership...


I cant think of anything that could be done that just uses labor and no parts... Can you provide an example?

Yes I can. My dealer spent four days trying to find a creak in my dash and even went so far as to take my entire dash out. I was told that if they don't replace any parts, the dealership won't get paid by BMW for the warranty work since it's labor only.

The reason I ask is my car wasn't fixed after all. I want to take it back, but I am I also imposing on the dealership if they aren't making any money?

[NaTuReB0Y]

my SA said that it cost them over $2k to replace my logic 7 CD unit......

i called it.....

[GMWNashville]

yea..didnt cost 2k...they replaced your l7 and recoded and programmed it? the modules $$ but not that much haha...anywho yea the techs get screwed on hours for doing warranty..it pays like half of what customer pay is as far as time is concerned...now making money on parts that i dont know about..its probably not much if any that i can tell you

[TurboFan]

Costs get covered, but no real profit. While parts and labor are a huge profit center for the dealer, the manufacturer doesn't pay what we pay. They get the parts at their own cost, and the they get labor at cost+overhead and a small pre-determined margin, if any. No money made, just costs covered for the dealer.

The only way to make money is if the tech can do the repair in less time than is prescribed by the mfg. If BMW says a process takes 4 hours, they pay four hours, as described above. But, if the tech does it in 3, the dealer makes money, and does the tech. BUT, if it takes 5? The lose money.