Your emails: Five ways car dealers make money
Your emails: Five ways car dealers make money
2:16

Your emails: Five ways car dealers make money

Cars
He folks, Brian Cooley from On Cars, taking another one of your emails about hi-tech cars and modern driving. This one comes in from Opono O, who says, why is it that car dealers are so reluctant to offer upgrades to infotainment systems like navigation updates, updates systems software, or, he asks, options on how to retrofit his car with things like Bluetooth, or presumably a better infotainment system. Well, I don't know about UK dealers Specifically but I imagine they're not too much different than those here in the US. So I'm a little surprised you're having a hard time getting your navigation software or system software updated. You didn't mention what kind of car you have so I can't get any more detail for you. However I'll tell you some car dealers, as simple a job as that is, are just not that tech savvy. They're still a little bit caught in the past in terms of what they focus on doing in their service department. Now, let's move on to your other question, which is how to get your car electronics updated. You were hoping to get new features added. It sounds like putting in a whole new system. And this is where it gets wild and wooly for car dealers. Bottom line is, they don't do that. That's what car stereo or twelve bolt shops are specialists in, because it tends to be a fair amount of custom work. Instead, car dealers make money five ways, and fiddling with stereos is not one of them. Car dealers get the majority of their initial customer relationship and money that comes from it, by selling you a new car of course. That's why they're featured right up front. Although new cars in it of themselves, are not huge profit centers. You want to be a nightmare to your dealer? Show up and buy an affordable car, pay cash, and get all your service done at a third party shop. They hate you, you're like a dead beat to them. The other area that's important is selling used cars. At some dealers its actually a better business then selling new cars. Financing or leasing either of the above is a big deal because they get a cut of that. If they do it through one of their partners, or in house lenders. Another big one for them are warranties or extended service contracts. Again, they get a cut of those as well, and that's above and beyond the factory I'm talking about there. And the last big bucket for them is the service bay, where you've gone and apparently been frustrated. But in the service bay, they wanna do things that are straight forward Repeatable factory procedures for the most part, and new tires, brakes and oil changes. They don't want to go cowboying around doing one off jobs because you want to add some features. It just isn't there business.

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