What's wrong with the automotive industry??

[DB_Cooper]

Great vid on issues with the automotive industry post Covid with ridiculous ADMs, dealer overhead costs, supply shortage, and how consumers bear the brunt of these costs.

[ASAP]

Great video!

I would ask back - what could we realistically do to fix this? I think this becomes almost at least partially a political discussion...

In addition - I feel many different industries / fields have been trending this way.

[Donatello.]

The bs costs are ALWAYS shoved up the azz of the consumer regardless of industry. Burn. It. All. Down.

[Donatello.]

Originally Posted by ASAP

Great video!

I would ask back - what could we realistically do to fix this? I think this becomes almost at least partially a political discussion...

In addition - I feel many different industries / fields have been trending this way.

Vote. Although all these politicians are crooks regardless of party...

Outside of that, we speak with our money.

[RM7]

Originally Posted by ASAP

Great video!

I would ask back - what could we realistically do to fix this? I think this becomes almost at least partially a political discussion...

In addition - I feel many different industries / fields have been trending this way.

Get rid of the laws requiring/protecting dealers

[DB_Cooper]

ADMs are dumb for any car. So refuse to pay those right off the bat.

I wouldn't mind paying a little extra for quality work by a dealer service dept, but more often than not they don't know what they're doing bc they're more interested in turnover and charging as much as possible to subsidize the cost of service advisors, the receptionists, the techs, the dealership bills, etc.

At least this is the case in the NE where we objectively have the worst dealers out there that embody all the negative stereotypes associated with the job.

[zx10guy]

Originally Posted by DB_Cooper

ADMs are dumb for any car. So refuse to pay those right off the bat.

I wouldn't mind paying a little extra for quality work by a dealer service dept, but more often than not they don't know what they're doing bc they're more interested in turnover and charging as much as possible to subsidize the cost of service advisors, the receptionists, the techs, the dealership bills, etc.

At least this is the case in the NE where we objectively have the worst dealers out there that embody all the negative stereotypes associated with the job.

I'm going to have to disagree with you a bit on your premise as to why the high service costs at a dealership. I've been involved on the service side of automotive in various capacities in the past and somewhat present. In the past, a good friend used to own a service shop. I hung out there a lot and got to see all the BS that few ever see unless they're behind the desk. All the BS stuff from customers and what he would sometimes eat to just make the problem go away and maintain his reputation. All the charges, insurance, fees, equipment leases, rent, etc, etc before he could even make a profit. He loved working on cars but the long hours and the proverbial swimming uphill to just try to make a living pushed him to sell his shop.

With that said, I have a friend that's a dealer tech and tells me from time to time the things going on at the dealership. Contrary to belief, the dealer techs are not making a fat living anymore. Many times they're just scraping by. The more experienced techs have either moved to other places (usually independents) or have just quit the business altogether. The dealership takes up the majority of the money being charged for repairs. This is why more and more people are complaining about the lack of quality repairs. The proverbial you get what you pay for. But in this case, it's the dealership paying as low as they can for techs to just get by. So you get junior level techs or techs that are very subpar. The customer isn't innocent with this whole situation either. He tells me he constantly hears of customers complaining about the loaner they're put in as their primary focus over what is wrong with their car. The customer demographics have pushed the emphasis towards posh waiting rooms, snacks, etc.

As to my friend, I don't know how long he's going to be in the business. Every time we speak about work, he's salty. I'd be surprised if he's still working as a tech there past a couple of more years. He's stayed as long as he has because of his seniority.

[RM7]

Originally Posted by zx10guy

I'm going to have to disagree with you a bit on your premise as to why the high service costs at a dealership. I've been involved on the service side of automotive in various capacities in the past and somewhat present. In the past, a good friend used to own a service shop. I hung out there a lot and got to see all the BS that few ever see unless they're behind the desk. All the BS stuff from customers and what he would sometimes eat to just make the problem go away and maintain his reputation. All the charges, insurance, fees, equipment leases, rent, etc, etc before he could even make a profit. He loved working on cars but the long hours and the proverbial swimming uphill to just try to make a living pushed him to sell his shop.

With that said, I have a friend that's a dealer tech and tells me from time to time the things going on at the dealership. Contrary to belief, the dealer techs are not making a fat living anymore. Many times they're just scraping by. The more experienced techs have either moved to other places (usually independents) or have just quit the business altogether. The dealership takes up the majority of the money being charged for repairs. This is why more and more people are complaining about the lack of quality repairs. The proverbial you get what you pay for. But in this case, it's the dealership paying as low as they can for techs to just get by. So you get junior level techs or techs that are very subpar. The customer isn't innocent with this whole situation either. He tells me he constantly hears of customers complaining about the loaner they're put in as their primary focus over what is wrong with their car. The customer demographics have pushed the emphasis towards posh waiting rooms, snacks, etc.

As to my friend, I don't know how long he's going to be in the business. Every time we speak about work, he's salty. I'd be surprised if he's still working as a tech there past a couple of more years. He's stayed as long as he has because of his seniority.

The problem is this system is too far removed from the actual car manufacturer that responsibility and accountability are non-existant. This goes both ways too, the mfr has this so whittled down for repair hours and reimbursement that its just a ridiculously business model at this point. If they don’t make enough money to keep the lights on at “retail/msrp”, they shouldn’t even show those numbers and I don’t blame them for exploiting unregulated capitalism principles (ADM).

[zx10guy]

Originally Posted by RM7

The problem is this system is too far removed from the actual car manufacturer that responsibility and accountability are non-existant. This goes both ways too, the mfr has this so whittled down for repair hours and reimbursement that its just a ridiculously business model at this point. If they don’t make enough money to keep the lights on at “retail/msrp”, they shouldn’t even show those numbers and I don’t blame them for exploiting unregulated capitalism principles (ADM).

Definitely, not disagreeing with you on warranty repairs. The warranty reimbursement rates for repairs is a total joke for both labor hours and book time. So yes, it's on the manufacturers too.

As to ADM, I don't blame the dealerships for charging them in this climate. I do as I have numerous times talking on this topic blame it on the consumer. If people would stop paying the ADMs, this problem would be less of a problem. You'll hear the argument about what the market will bear and that's why pricing is up. Yes and no. In the end of the day, a car marked up from say $30k is still a $30k car in real value. That car was designed by the manufacturer to meet a price point with materials and engineering. It doesn't magically increase in the engineering and materials value because everyone is paying $10k over MSRP.

I have and still will continue to refuse to pay over sticker for any vehicle. I managed to purchase a new S1000RR earlier this year for under sticker. If I had to pay over, I would have walked away.

All this irrational exuberance is affecting those that can least afford it. The ones that are barely making ends meet and had their car blow up on them. Those are the ones I feel for. Where they have to buy a car and not buying one because they're changing underwear as many US consumers do. My mom had to get a new car recently and thankfully I was able to get her into one at MSRP because her Jeep's engine took a dump.

[DB_Cooper]

Originally Posted by zx10guy

I'm going to have to disagree with you a bit on your premise as to why the high service costs at a dealership. I've been involved on the service side of automotive in various capacities in the past and somewhat present. In the past, a good friend used to own a service shop. I hung out there a lot and got to see all the BS that few ever see unless they're behind the desk. All the BS stuff from customers and what he would sometimes eat to just make the problem go away and maintain his reputation. All the charges, insurance, fees, equipment leases, rent, etc, etc before he could even make a profit. He loved working on cars but the long hours and the proverbial swimming uphill to just try to make a living pushed him to sell his shop.

With that said, I have a friend that's a dealer tech and tells me from time to time the things going on at the dealership. Contrary to belief, the dealer techs are not making a fat living anymore. Many times they're just scraping by. The more experienced techs have either moved to other places (usually independents) or have just quit the business altogether. The dealership takes up the majority of the money being charged for repairs. This is why more and more people are complaining about the lack of quality repairs. The proverbial you get what you pay for. But in this case, it's the dealership paying as low as they can for techs to just get by. So you get junior level techs or techs that are very subpar. The customer isn't innocent with this whole situation either. He tells me he constantly hears of customers complaining about the loaner they're put in as their primary focus over what is wrong with their car. The customer demographics have pushed the emphasis towards posh waiting rooms, snacks, etc.

As to my friend, I don't know how long he's going to be in the business. Every time we speak about work, he's salty. I'd be surprised if he's still working as a tech there past a couple of more years. He's stayed as long as he has because of his seniority.

I absolutely agree that the techs are not making lots of $$$$. They're in fact used by a dealership to subsidize the overhead of the dealership as a whole.

Like any business it's tough to be good at your job, be it on the sales side or the service side.

Anecdotally I've had much better experience at Indy shops vs a dealership. I'm lucky to have found a great Indy shop and travel 1.5 hrs to a dealership I trust for any warranty related work.

In terms of sales, I was also lucky enough to find a great CA for a new BMW purchase, and even if she's charging a little more for a car, I'd much rather give her the sale than the dealers in my geographic area.

[XutvJet]

Are dealership techs really that underpaid for what they do? Yes, it's physical labor to some extent, but as a fairly experienced automotive DIYer myself and 48 years of age, I don't find the work that particularly hard. I would find IMMENSELY easier too if I had a lift and access to a ton more tools. I've definitely learned over the years that having the right tool for the job makes a job so much easier plus these guys have access to staff knowledge, tech support, and service manuals. For most jobs, the tech has done them a million times like a brake or suspension job. Most electronic and motor issues are self-disclosed once the tech hooks the car up to a scanner.

Tech pays ranges from $24/hr to $45/hr, depending on years of experience and location. They work a 40 hr week with the option for overtime plus bonuses as well as 401K and insurance. This isn't terrible pay for trade job, especially since many techs don't have 4 year degrees and big college loans to pay off.

It is also a lower responsibility job, meaning they don't have the stress of managing staff or clients, dealing with emails and meetings all day, sitting on your ass all day writing, working way more than 8 hours in a day, and most importantly, they don't have to take work home with them or be available afterhours like so many of us are. Their work day ends when they leave.

I guess I don't feel immensely sorry for them making $55-70K year base not including OT and bonuses given their job duties and responsibility.

[dreamingat30fps]

Originally Posted by zx10guy

Definitely, not disagreeing with you on warranty repairs. The warranty reimbursement rates for repairs is a total joke for both labor hours and book time. So yes, it's on the manufacturers too.

As to ADM, I don't blame the dealerships for charging them in this climate. I do as I have numerous times talking on this topic blame it on the consumer. If people would stop paying the ADMs, this problem would be less of a problem. You'll hear the argument about what the market will bear and that's why pricing is up. Yes and no. In the end of the day, a car marked up from say $30k is still a $30k car in real value. That car was designed by the manufacturer to meet a price point with materials and engineering. It doesn't magically increase in the engineering and materials value because everyone is paying $10k over MSRP.

I have and still will continue to refuse to pay over sticker for any vehicle. I managed to purchase a new S1000RR earlier this year for under sticker. If I had to pay over, I would have walked away.

All this irrational exuberance is affecting those that can least afford it. The ones that are barely making ends meet and had their car blow up on them. Those are the ones I feel for. Where they have to buy a car and not buying one because they're changing underwear as many US consumers do. My mom had to get a new car recently and thankfully I was able to get her into one at MSRP because her Jeep's engine took a dump.

This. Just stop paying it! The people paying this nonsense are the ones feeding the fire then complaining everything is on fire. Only new car I've purchased was my Tesla for MSRP as is the case with all Teslas and before their price hikes.

The used car market is definitely taking a down turn, so I wonder what's going to happen when all these people who paid $30k over for their cars now want to sell them and they are worthless.

[RM7]

Originally Posted by dreamingat30fps

This. Just stop paying it! The people paying this nonsense are the ones feeding the fire then complaining everything is on fire. Only new car I've purchased was my Tesla for MSRP as is the case with all Teslas and before their price hikes.

The used car market is definitely taking a down turn, so I wonder what's going to happen when all these people who paid $30k over for their cars now want to sell them and they are worthless.

Market value is whatever you pay.

[zx10guy]

Originally Posted by XutvJet

Are dealership techs really that underpaid for what they do? Yes, it's physical labor to some extent, but as a fairly experienced automotive DIYer myself and 48 years of age, I don't find the work that particularly hard. I would find IMMENSELY easier too if I had a lift and access to a ton more tools. I've definitely learned over the years that having the right tool for the job makes a job so much easier plus these guys have access to staff knowledge, tech support, and service manuals. For most jobs, the tech has done them a million times like a brake or suspension job. Most electronic and motor issues are self-disclosed once the tech hooks the car up to a scanner.

Tech pays ranges from $24/hr to $45/hr, depending on years of experience and location. They work a 40 hr week with the option for overtime plus bonuses as well as 401K and insurance. This isn't terrible pay for trade job, especially since many techs don't have 4 year degrees and big college loans to pay off.

It is also a lower responsibility job, meaning they don't have the stress of managing staff or clients, dealing with emails and meetings all day, sitting on your ass all day writing, working way more than 8 hours in a day, and most importantly, they don't have to take work home with them or be available afterhours like so many of us are. Their work day ends when they leave.

I guess I don't feel immensely sorry for them making $55-70K year base not including OT and bonuses given their job duties and responsibility.

Yes, they're underpaid. Just because you're looking at it from the lens of a DIY does not mean a dealer tech shouldn't get paid appropriately. What you don't see are all the trouble jobs. The intermittent issues that are sometimes there and sometimes not. When you're assigned a job, you're stuck with it until you get it done. This is why many techs always prefer the gravy jobs. Brakes, oil changes, suspension work, etc. How techs make their money is busting their butts knocking out jobs under book time. Because they get to charge the full amount of hours and then can move on to another job before their book time is up. This requires busting your butt all day. You working on your one car at your leisure is different than being on your feet a minimum of 8 hours a day even with lifts. It's still physically taxing.

But getting back to intermittents or electrical are always jobs that gets dumped on the junior or techs that don't have any seniority. Because the chances of them going full book time or beyond is very high. Yes, if the book time says they should have fixed the problem in two hours but they take 3 or 4 hours, they've worked for free for the hour to two hours extra.

My friend that owned his shop would field problem jobs from local dealerships because he was very good at diagnosing those things. My other friend that's a dealer tech has been asked to get onto troublesome jobs as he has a lot of experience to get the problem sorted. But he only does those jobs when his manager kind of begs him and he takes pity on the junior tech that's been slaving away for hours trying to figure out what is wrong.

[M3WC]

Originally Posted by dreamingat30fps

This. Just stop paying it! The people paying this nonsense are the ones feeding the fire then complaining everything is on fire. Only new car I've purchased was my Tesla for MSRP as is the case with all Teslas and before their price hikes.

Model 3 and Y get $3750 discount through end of December.

https://electrek.co/2022/12/01/tesla...us-this-month/

Originally Posted by dreamingat30fps

The used car market is definitely taking a down turn, so I wonder what's going to happen when all these people who paid $30k over for their cars now want to sell them and they are worthless.

Those people are going to be stuck in their vehicle for quite some time, unless they want to eat negative equity. We are in this weird time where lease buyout and trade-in quotes are getting worse by the day. Down 15-20% from middle of the year. Resellers are done paying top dollar for second hand cars. But used vehicle prices remain high, because dealers/resellers paid astronomical prices for their current inventory. On top of that, lease and loan rates are terrible for almost all brands. Awful time to be shopping for car.

[Donatello.]

Originally Posted by zx10guy

Definitely, not disagreeing with you on warranty repairs. The warranty reimbursement rates for repairs is a total joke for both labor hours and book time. So yes, it's on the manufacturers too.

As to ADM, I don't blame the dealerships for charging them in this climate. I do as I have numerous times talking on this topic blame it on the consumer. If people would stop paying the ADMs, this problem would be less of a problem. You'll hear the argument about what the market will bear and that's why pricing is up. Yes and no. In the end of the day, a car marked up from say $30k is still a $30k car in real value. That car was designed by the manufacturer to meet a price point with materials and engineering. It doesn't magically increase in the engineering and materials value because everyone is paying $10k over MSRP.

I have and still will continue to refuse to pay over sticker for any vehicle. I managed to purchase a new S1000RR earlier this year for under sticker. If I had to pay over, I would have walked away.

All this irrational exuberance is affecting those that can least afford it. The ones that are barely making ends meet and had their car blow up on them. Those are the ones I feel for. Where they have to buy a car and not buying one because they're changing underwear as many US consumers do. My mom had to get a new car recently and thankfully I was able to get her into one at MSRP because her Jeep's engine took a dump.

Yea, get that ADM on top of record profits lol come on man!!!!

Also, not like ADM is a new thing. It's pure greed & morons need to stop paying it. Then it will go away

[Donatello.]

Originally Posted by dreamingat30fps

This. Just stop paying it! The people paying this nonsense are the ones feeding the fire then complaining everything is on fire. Only new car I've purchased was my Tesla for MSRP as is the case with all Teslas and before their price hikes.

The used car market is definitely taking a down turn, so I wonder what's going to happen when all these people who paid $30k over for their cars now want to sell them and they are worthless.

Repo man is coming! So is the foreclosure fairy

[tdott]

Originally Posted by XutvJet

Tech pays ranges from $24/hr to $45/hr, depending on years of experience and location. They work a 40 hr week with the option for overtime plus bonuses as well as 401K and insurance. This isn't terrible pay for trade job, especially since many techs don't have 4 year degrees and big college loans to pay off.

I guess I don't feel immensely sorry for them making $55-70K year base not including OT and bonuses given their job duties and responsibility.

Keep in mind, they don't get hourly. They get hours based on the book rate which is better, many good techs can make 120-200 hrs in 2 weeks during the busy periods. Easily clearing 100k. It's hard work and they have to hustle but it's fairly common.

It's also the reason why good work isn't incentivized. They are looking to get cars in and out asap and they are paid to do so.

[dreamingat30fps]

Originally Posted by RM7

Market value is whatever you pay.

Not sure if being sarcastic or not.

Originally Posted by M3WC

Model 3 and Y get $3750 discount through end of December.

https://electrek.co/2022/12/01/tesla...us-this-month/

Yeah I saw that. I'm guessing they are trying to nudge the people waiting for the tax credit next year. Still even with the discount it's more than I paid back in March before their price hikes.

Originally Posted by M3WC

Those people are going to be stuck in their vehicle for quite some time, unless they want to eat negative equity. We are in this weird time where lease buyout and trade-in quotes are getting worse by the day. Down 15-20% from middle of the year. Resellers are done paying top dollar for second hand cars. But used vehicle prices remain high, because dealers/resellers paid astronomical prices for their current inventory. On top of that, lease and loan rates are terrible for almost all brands. Awful time to be shopping for car.

Yup. I guess a lot of dealers have their head in the sand just hoping there's enough suckers left out there to buy at the inflated prices. Meanwhile wholesale prices are going down every week. It's a total cluster fuck. I just hope people smarten up and stop paying over msrp or paying new car prices for used cars. Honestly it was kind of fun while it lasted as I definitely took advantage of selling some of my cars for more than I paid for them, but would not want to be in that boat right now. Never in my 40 years were you able to buy a car, drive it for a year and sell it for more than you paid.

[Germanauto]

What blows is my whole life being told "stay in school forever to enter X career, become successful, etc. and you'll live a luxurious life." Then by the end of it, when I'm finally earning what's considered a very high salary for my age, the cost of living in America has spiraled out of control. My car hobby gone to sh*t thanks to skyrocketing prices and electrification galore.

Glad I got myself a very fun little car at a nice discount last year, but it's depressing seeing how other enthusiast cars have increased in price so drastically just in the past 3-4 years. I remember when people were getting F80 M3s for under $1000/mo. I'm looking at a Boxster S/GTS next, but that'll have to wait a couple years thanks to interest rates and dealer price gouging. These things used to sit around gathering dust at a 7% discount.

[XutvJet]

The dealership day of reckoning is coming. The business model that worked during the latter part of COVID is no longer sustainable and the dealers know it. Those that had the money have already bought cars. The vast remainder are sitting it out now.

[Mingwan]

i wish Mark would make more videos like these. but i get it. the algorithm favors content creators telling viewers if a car has chi wireless charging or if the dash is made of injection molded plastic.