Are service costs justified?

Over the past 2 days i have had 3 cars serviced and whilst not whinging about the costs i wonder if the different cost for different cars is justified? I had the P car serviced yesterday and the minor service cost $1245, the day before my 6 months old CRV minor service cost $253 and the 2 year old  Euro service cost $645. Do you think the variance is justified? By the way, I hate January's.

Do you know exactly what they did to the Porsche, what is involved in a minor service, is it all spelled out for you, or do you just cop it cause its a premium brand so premium price.

what did they do to each car?

This is PCSS current 911 pricing.... I'm going to take up that $695 special...its due EOM anyway. Consider the 911 takes about 10L of Mobil one & a year of Roadside assist is included... I don't think $695 is too bad for a normal service... seems like you had the intermediate one Harold?

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"intermediate shafting " more like it , a friend had his newish Cayenne diesel minor serviced for similar money.

from the invoice: Perform Minor service    $384.00 Brake Fluid Flush           $172.80 Parts incl Cabin air filter $267.68 Mobil engine oil              $225.15 Ultra stop brake fluid      $  37.60 Hire Car                          $  20.00 Env waste levy               $  13.90 Workshop supplies         $  10.80 GST                                $113.20 Total charge                    $1,245.13

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where do you go to get this pricing?

I'd say a special intermediate. Not really any different to any other make, still got belts, pulleys, oil etc to make it run, just premium German service costs i guess.

the pricing at Porsche Centre Brisbane is significantly lower!  Would post a pic if I could work out how to do it.

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That's just on Porsche Centre Sydney South's site: http://www.porschesydneysouth.com.au That is where I get my car serviced as they're my closest dealer Harold. (No late model Porsche independents that I know of here in the south/east) I note your $20 charge for the loaner... that's the only thing that seems cheap lol (PCSS charge me $44) Definitely, previous owner use to service my car there... the prices he mentioned to me prior to me buying it seemed unrealistic... but they are true! This may be helpful

I challenged a BMW service bill recently and was politely enlightened that it's because they are "experts" on their own cars and as such justify charging $198/hour for labour. Fitting a heavy duty towbar to a new X5 cost $4,200. Only $1,200 for the hayman Reece bar, the rest in BMW loom, labour, ecu reprogramming etc.......unfortunately independents I spoke to were uncertain about loom, ecu interface etc and not confident for the new model. They make the cars more and more complex (eg. they've removed service books, it's now stored in the key making it harder for independent workshops to keep up) to further protect their cash cow. Margins on new cars are low, they need to ensure they make their profit in the workshop. Absolute rip off in my view and their behaviour is borderline anti competitive. I'll typically use an independent workshop at half the price whenever I can and I'm absolutely convinced it makes no difference to resale value.

A guy at work told me today that he got a basic towbar fitted to his car and it was an ECU re-programme, in a 5 yr old Mitsubishi Lancer, $800 odd dollars. Ecu re-programme just for a towbar, this is the first time I have ever heard of this, cars are getting too complex when this has to be done.

Enviro waste dumpage fee is a rort

And I thought $2,500 for the Cayenne tow bar was outrageous, especially as the Audi Q7 one was $1k cheaper! $4,500 for a tow bar is why resale on Europeans suffer so badly and it will only get worse the more they fleece owners. The new owner of an X5 might be able to cop a bill like that but the owner of a 5 year old one might not.

Prices seem reasonable considering many owners of newer cars are leasing them and paying pre tax $ I reckon if you can afford the depreciation you can afford the service. Or do the minor services at home. It isn't brain surgery!

My local BMW dealer charges $120 an hour. The big ripoff I see in that itemised bill is the parts. The oils are separate - nearly $300 for parts including cabin air filters. Cabin air filters should cost 20-30, but I bet you're paying closer to 70. The labor seems high but they did do a brake flush and oil change...still stretching it if you ask me. The truth is that working out looms and recoding for things like towbars isn't that difficult, but they are getting smarter and smarter about locking off the electronics to make it harder to write software to talk to it. But the aftermarket is never far behind. The EU has been making noises about ensuring that cars can be serviced by independents.

Generally for a service  there is a scheduled labour time per job and this is what is used to charge labour costs regardless of actual time taken.  i have watched / assisted professional mechanics and they have some neat short cuts. Two or more jobs can be performed at the same time but charged at individual job rates.  Labour is charged at a "book rate" but you know the mechanic is not getting paid that (and is pushed to work faster and more efficiently) Another is parts…..they get parts at "industry rates", like every retailer/builder etc (Bunnings have three rates I'm told) and mark the price up to "recommended retail".  This could be 50%, 100%, etc whatever is dictated by the manufacturer or wholesaler. (jewellers charge a minimum of 200%, (so when they have a 50% off sale, they still make 50% )..….again this is across the board.  So when you buy your parts and take them with you to the service, you are still paying a retail price, maybe slightly cheaper than RRP, don't expect the mechanic to be overly happy that you have the parts.  He has just lost a huge profit.  Some workshop don't mind, it saves them search time, hence, using up resource time time for no income, so balances out.  ASK first. These are my observations and my 2 bobs worth. Funny how 2 bob is only worth 2 cents these days.  'Spose that's inflation for you.

You're not just paying for time. You're paying for expertise and experience. That's the exact reason I stopped taking my (BMW) cars to BMW dealerships. They didn't have experienced staff working on the cars but I was paying a premium. They often did more damage than good... I'm happy to pay my independent mech $100 an hour because I've watched him work and have done some work with him. He solves problems and knows merc, VW, bimmers inside out. We have a professional relationship and I can trust him. (That's why he works on the 964 even though he's done very little p-car work. Though many of the systems are the same...bosch etc) Its always interesting to hear his opinions on the cars as he sees the 'reality'. For example, He wouldn't wish a contemporary 4 cylinder bmw to his worst enemy...or recommend anyone buy a dsg or twincharged vag car So...are the rates worth it? If modern dealership porsche mechanics are anything like BMW and VW...then no way!

agreed, i don't mind paying extra if it's done right. no use saving a buck if you have to redo it. or paying extra for a bad job..

The "Dealership" is a franchise which means they have to pay the Manafacturer ( say Porsche) a fee for this, along with meeting the conditions of being a Porsche Dealership such as the colour of the showroom floor tiles to the brand of equipment used in the workshop. Add in the ongoing training of staff and updating required tooling only supplied by Porsche, and you start to see how big an investment a dealership can be regardless of brand. So for them to get a return on this investment they need an hourly rate that will provide it, and while its some time since I actually worked in this area of the industry I'm still pretty sure the Manafacturer does not dictate what the rate is. This is the same for parts even though there might be a MRRP the dealer can charge what they want and still call it " List Price". There was certain dealer in Brisbane that was adding something like 10% to the MRRP, and it only stopped (allegedly) after a backlash from their trade customers (Panel Shops etc.) who were getting their invoices adjusted by insurance company's. (Most insurers only pay MRRP ). Dependant on the amount of parts a Panel shop/Independent mech buys from a dealer it will vary the discount (trade price) they buy them at, but generally speaking (USA/Euro 5-12% - Japan 20-33% - Domestic 15%) these will vary dependent on some parts of course. Manufacturers do have scheduled times and while they must be used and used correctly when the dealer is making a warranty claim, they would tend to be only used as a guide or starting point when the "Retail" customer is paying (rare to see an invoice with the times). Most service departments overbook the diary not just to cover for no shows but as the mechs (or techs as they say these days) are on a bonus system. Basically they buy 8 hrs a day from the tech for usually around 25% of there charge out rate, and if the tech does 12hrs work in 8 hours they get 4 hours bonus. Some say this can drive the wrong outcome and results in poor quality work but usually if there is re-work then time taken to redo it is deducted from the techs bonus. I don't have a problem with paying someone an hours labour even if it only took them 40min to do the job, if there training,experience and investment in tools is what makes them efficient. But getting charged 2 hours for a 1 hour job because the tech is inexperienced/slow or dosn't have the right tool, well that's just stealing. Oh and before I forget, the warranty rate a dealer gets from the Manafacturer will be 30 - 50% less than their retail rate. Somebody mentioned not wanting to pay expert rates for a tech who was not an expert! And quite right too. Without going into the whole story, I was involved in trying to resolve a problem for guy who had an accident repair done. - Anyway while chatting with the service manager about the lack of skilled tradesmen these days, he told me they now have dedicated diagnostic technician who's cost (wage) was subsidised by the manufacturer. He was there to help the other techs and ensure the correct procedures were being done, and of course was only partially productive. A sign of the times unfortunately. Can't say my 2 bobs worth so just my version of the truth

Stealerships

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The cabin air filter (99157362300) cost $156.23 plus gst. Go figure.

Funny how 2 bob is only worth 2 cents these days.  'Spose that's inflation for you. You won't be able to get 5 cents worth shortly !

As an ex-manufacturer representative for three different makes Ive seen this issue raised by owners for years. It shouldnt come as any surprise that the franchise dealer networks of any brand will use their "brand legitimacy" to justify "expert service pricing". Quite simply, Having seen dealer operations across multiple markets I can assure you that all dealerships generate BY FAR of their bottom line from fixed operations (parts and service). In fact, most new car departments even in elite brands run at a near break even just so as to put cars into the service program. In Singapore, all new Porsches were covered under a comprehensive 5 years "total service plan" that even included tyres and brakes. All of the cost of these types of programs are font ended into the sale of the car so as to guarantee the car into the genuine service network for as long as possible. Added to this the extra complexity of ECU designs you can see where this is all coming to eventually, genuine service will likely be your only option on a new car in the near future. Just as a reference for you, Toyota Singapore generates 85% of its net profit annually from the fixed operations side of their business. Massive!

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Well, the bird says that: - non genuine part is $16.25 for the cheapie, $24.50 for the mid-range, and $66 for the genuine Porsche part (USD prices). Porsche Cabin Air Filter 99157362300 So they took you for at least 100% higher than the USD market price and 7 times the generic part replacement cost.  Nice work if you can get it,  I wish I could charge like that.

They really do take you for a ride when you are in the warranty period. They know you won't do anything to jeopardise your warranty such as fitting non genuine parts. As an aside I also worked for an automotive manufacturer/importer in my younger days and we knowingly sold a particular brand at a $200 loss. After 2 years we had made $400 profit on the parts. That was late 70's and early 80's.

I had two Nissan vehicle's and I noticed that their own service agreement form mentioned that they may or may not use genuine parts or products. Next service I provided engine air cleaner elements, cabin filter and wiper refills. Saved me heaps and they had no recourse on warranty.

That all looks very inexpensive, compared with Veyron servicing costs...  Apparently you have to return the car to the Bugatti factory for its yearly service, and if the factory decides something, such as the tyres, needs replacing, so be it.  If you don't agree, the factory refuses to support the car... http://www.autocar.co.uk/car-news/used-car-buying-guides/how-buy-used-bugatti-veyron

Harold - it's your cash but if it were me I'd be getting the parts ordered in and deliver the car for service with genuine Porsche parts on the front seat ready for install.  If they install them they have to honour the warranty because they are the ones who accept and install them. Maybe it would only save $200 or so per service... I guess if you have a new 991 $200 is pocket change.  If it were me, I could still see myself doing it just out of sheer distaste for being ripped off blind, and to prove a point.

I definitely can not afford a Veyron. £100,000 a year to keep it on the road exceeds even my boat cost. Mind boggling.

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that is an obscene amount of coin to keep a bloody car on the road! I had read that every Veyron sold was at a loss to Bugatti (and probably a tax break for Volkswagen AG )... well now we know where they make that up loss.....

I get a "free" cappuccino at my Porsche dealership, served by a young girl in a short skirt, long jacket.  Totally makes the huge service bill really worth it... not. Getting your car serviced at the dealership [to keep warranty or give you that satisfaction that you think your car is really being looked after] is VERY expensive! Here's a few of my most memorable moments: [bMW X5 3.0 SD] $5,000 to replace turbo manifolds - required an engine drop, $60 headlight bulb, $80 for a windscreen wiper blade, a quote for $10,000 for new sunroof because the seals needed replacing [you can't buy seals - discontinued item from 2008! go figure], insurance claim for new computer $15,000 - cause they got wet from water coming through sunroof... [Porsche Boxster S] quote for $10,000 for new gearbox, 1st gear syncro failed from driving the car "too hard"... [Porsche 997 S] first service experience - bill for $1,200 after just buying the car and having it with full warranty and being told everything was done....  I did get that Cappuccino though

Geezze,  Harold I think I would start to catch the Bus

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That sux - got mine serviced last week and all I got was this to drive for the day I don't go to the dealer for big ticket items but for annual service at $700 I think it's ok

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Sounds familiar... $15K to rebuild the 997 gearbox after 2nd gear syncro failed from driving the car "too hard". Said they'd never seen such a thing.

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Nice one, clever noticing that loophole

Hmmm, how do you drive a car "too hard" in 2nd gear... especially a Porsche...  It's very dumb and really pisses me off.   I remember the Service Manager back then telling me I should have bought a GT3 or Turbo if I was going to drive like that, cause they're the only two cars of which have a gearbox that can handle a few red-lines and they can also tear down those gearboxes and repair them. So I've gone and bought a 997 Carrera - lol I even know how to 'heel toe' downshift etc.. match-revs or whatever you want to call it.  Amazing that a 986 [and 997] box can't handle it.

Interesting thread.. I've had some surprising dealings with Doncaster BMW with my MINI. When they did the Clutch, they phoned to say the Flywheel needed replacing.  Quoted me OEM $1700 just for the flywheel I gasped.. they then rang me back with a revised OEM quote of $1400.. I gasped.  They then rang me back again and said we'll install an aftermarked FW for $900 So thats what I did! Then the car developed it's 'leak' a week later. I took it back as we thought it was clutch fluid. Turned out its power steering fluid. Quoted me 2 prices  $1300 for a new OEM Power Steering Pump and the high pressure line and I got a second quote $900 for a Aftermarket PS Pump and the OEM High pressure line. I took the car for a second opinion, showed the indy mechanic the quotes and they scratched their heads and couldn't believe the OEM quote i had as it was below cost. Doncaster MINI seem to be giving the Independents a real run with these types of quotes. And whoever heard of a Dealer installing aftermarket parts? BMW would have a fit would they not? The Indy mechanic flushed out the fluid, tightened up all the PS connections and touch wood - its stopped leaking.

R53s are way out of warranty so its no risk to the dealers to install aftermarket parts. It's not the parts prices at the dealers that are the problem. It's the children they put on the job to do the work. I use indies because they are less likely to muck it up.

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From what I understand most dealers are doing under cost servicing, but part of the servicing is built into the original price of the car so if it goes to an indy then they have profited and warranty has been voided.

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Mike, that is not the case. Warranty can not be voided for servicing outside the dealer network. Not with any marque. I forget what the exact wording is, but independents are allowed to work on cars under warranty, and need to be using "acceptable" quality parts, which is one of the reasons why we use OEM filters, clutches, brakes etc.

Thanks for the correction James

I spent years in and around the car dealership game.  The average Australian car dealership makes ~2% net profit on sales . . . a very, very thin profit margin.  As someone else commented, most dealers lose money on new car sales, and many lose money on used car sales too.  They make a small amount of profit on their on service and parts. So, where do they make the money?  F&I (finance and insurance) and aftermarket accessories (tint, chemicals, etc).  That's where they make almost all the profit-- ie, maybe 80% of total profit at a typical dealer. That's the sad part about the industry.  Despite the crazy service fees we pay, most dealerships are so badly managed that they still make only a small profit on service!

I just found this in a Deloitte report.  Only thing I think it understates is how important aftermarket accessories are in dealerships.  If sold effectively a dealer will get these added on to around a third of cars sold at a profit of $500-700/car.  That's a BIG profit contributor. The Deloitte report is a bit out of date (2013) but makes the point: To start, the average dealer in 2013 lost money selling new cars. In fact, if we think of a hypothetical dealership which made a total net profit of $100 for the year, the new car department would have “contributed” a loss of -$75 towards that total! The used car department of the average dealer was only slight better, losing -$11 for our hypothetical Dealer Principal, while the Parts department would have generated a grand total of $19 in net profit, and the Service Department just short of $30 net profit. Across these four core departments, therefore, our hypothetical dealer actually lost around -$40. So how did this hypothetical dealership move from a loss of -$40 to a total net profit of $100? Essentially, through Finance & Insurance, with a little bit of miscellaneous “Other Income”. In fact, the average dealer has become so dependent on F&I that it now contributes 140% of their net profit! This creates an immediate and urgent challenge for the average dealer: if new car gross profit continues to decline because of the competitive market, where will they make up the difference now?

I would doubt those figures are accurate for most Aussie (edit: non prestige) dealerships, and the US market works completely differently to ours, with most cars being bought soley on payments/finance, rather than price(making FnI a much bigger profit centre, and margin in other areas less important), but thats irrelevant IMO, as when talking a Porsche dealership in Australia, then all bets are off as to profits centres within the business. I would put money on all departments contributing profit but would that really surprise anyone ? If anything they could probably lose some money providing service, as a cost of doing business and still be a highy viable business, although as stated I am doubtful this is the case.

I'd believe the figures.  The interest payments on a car far exceed the margin for everything else. Even though Porsche and MB and BMW have been robbing Australians blind for years, it's the head office that does it, invoicing the cars expensively to the dealer.  The dealer doesn't benefit other than collecting bigger commissions on bigger finance packages.