wash program with car dealer

[Stuart]

Next door to my wash is a car dealership which is on the extra small size compared to the mega size dealerships that have their own IBA. I currently sell my neighbor tokens to use my IBA at a 20% discount - the same discount I give all customers buying tokens in bulk. My question, is there any of you who have a program with some car dealers which is different from what I am currently doing?

 

[MEP001]

Small car dealers are the worst to deal with. I've had a few approach me wanting to buy tokens at a discount, but they wanted half-price and would only buy $5 worth at a time. That IMO isn't a bulk discount, that's just being a tightwad.

 

[robert roman]

“….is there….program (for) car dealers which is different from what I am currently doing?”

Yes, there are different programs but they are not commercially viable for small market car dealerships that sell a total of 100 or less new and used cars per month.

Small market dealerships are a dying breed because the method of compensating dealership owners has changed drastically.

Profit margin on new cars is very narrow. To make money, dealers must sell high volume and maintain a high customer satisfaction index (CSI).

Without volume, profitability of dealership depends on selling repair and maintenance service and “value-added” like GAP insurance, 5-year paint and fabric warranty, windshield etching (vehicle registration numbers), clear-bra, extended service warranty, etc.

Here, an MSRP price is established for each product which is then up-sold by the F & I department for usually a 200 percent mark-up.

Consider a detail shop that subcontracts with a new car dealership.

If retail price of exterior detail is $100, dealership expects to pay wholesale price or $50.00. Car dealer then turns around and charges their customer $150 and profits at the detailer’s expense.

It’s still possible to “play ball” with some small market dealerships but don’t fall into the trap of subsidizing their operation at your expense.

 

[rph9168]

On the surface it seems like a good idea to work with car dealer. I have been involved in many dealer programs. Few of them have proved to be worth the time and effort. I agree with Robert. Dealing with them is a slippery slope. If you do put something together make sure it is profitable and convenient for you. As Robert points out dealers are always out to take every advantage they can with little or no regard for you. I think anything you do should be a pay in advance deal to make sure you get your money up front. Dealers are quite often slow or no pay.

 

[hkim310]

We have worked with numerous dealers in our area. We give them 20% off, nothing more, and only if they bring a minimum amount of vehicles. They typically bring a bunch of vehicles for a month or two and then it usually tapers off. I agree with others that state some dealers expect the details to be 50% or more off because they are a dealer but unless it is profitable to you, don't agree with those terms.

 

[carwash11147]

My best deal for any and all customers is 50% off when you buy 100 car washes at my automatic bays. My basic wash costs $5.00 so that is $250 up front to me. I have a car dealer down the road from my wash that I sell 200 washes for $2.00 each. They bring a check and I hand them the washes. They average 400 washes per month. With every vehicle they sell (about 100 per month) each gets two free wash coupons to my wash. Also, every vehicle that is serviced gets washed in-house but if their wash rack gets backed up or the weather is inclement they give the customer a wash coupon. They also wash some of the vehicles that are sitting on the lot from time to time. I feel I benefit from this arrangement for the following reasons:
1) My variable cost of a wash for me is about $1.00.(Leaves $1.00 for fixed costs/profit)
2) About 15% of these washes never get redeemed.(Leaves $0.30 per wash for fixed costs/profit)
3) Introduces some new customers to my wash who may never have been there before. People are creatures of habit and a new car owner typically washes more frequently then a person with a old car.(Hopefully, they will be back and pay full price next time)

Yes, I know some of these customers would be paying full price for some of these $2.00 washes, but I feel the long term profit of this arrangement outweighs the short term loss. My $0.02.

 

[Stuart]

Thank you for your responses.
The dealer has not approached me about any program beyond what we currently have. Carwash11147's sounds interesting. I know that the dealer does not wash their cars with lines at my IBA so it would be during the units slow time. Some business-discounted- may be better than none. Food for thought...