The Truth About Cars » trough http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 08 Aug 2014 16:26:48 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » trough http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Watch Out: Your Dealer Is In Trouble, And He Needs Your Money http://www.thetruthaboutcars.com/2012/05/watch-out-your-dealers-is-in-trouble-and-he-needs-your-money/ http://www.thetruthaboutcars.com/2012/05/watch-out-your-dealers-is-in-trouble-and-he-needs-your-money/#comments Mon, 21 May 2012 15:41:28 +0000 http://www.thetruthaboutcars.com/?p=445380 Five years ago, car dealers throughout the country were hit hard by carmageddon. Now, they are about to get hit again where it really hurts: In the workshop, where the real money is being made. The auto sales collapse of 2008 winds its way through the years like a diet through an anaconda. While showrooms […]

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Five years ago, car dealers throughout the country were hit hard by carmageddon. Now, they are about to get hit again where it really hurts: In the workshop, where the real money is being made. The auto sales collapse of 2008 winds its way through the years like a diet through an anaconda. While showrooms were empty five years ago, now it’s the service bays that are deserted.

Says a J.D. Power and Associates study quoted by Automotive News [sub]:

“The number of vehicles in operation that are 5 years old and newer will dip to 63 million this year, forecast to be the low point of the industry’s downturn and recovery, according to J.D. Power and Associates. Late-model vehicles traditionally represent the sweet spot for repair and maintenance work for dealership service departments.”

Why will this be more painful than empty showrooms? In 2011, the service and parts business represented 13 percent of overall sales for the typical dealership but contributed 72 percent of dealership operating profits, according to the National Automobile Dealers Association (NADA). Used car sales often contribute one third of the profits, new car sales often are loss leaders.

Dealer workshops would have no problem surviving the trough if they would have held on to owners of older vehicles. The servicing of older vehicles can be the most profitable part of the business, new vehicles on the other hand need less and less service. However, owners of older vehicles typically give dealer workshops wide berth.

If your car is out of warranty and still being serviced by a dealer, watch for serious upselling. They need your money more than ever.

 

 

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