Independent Garages – Car Dealerships – Is there a difference?

Independent Garages – Car Dealerships – Is there a difference?

Posted on 11/02/2019 by Ian Deakin

I will start by giving you a little background regarding myself to hopefully give some credibility to the facts I am able to present for your consideration on this subject.

On leaving school I took a five-year apprenticeship as a Motor Technician attending college on one day a week for five years and night school for two nights a week for two years to gain my professional qualifications. I studied technology, consumer law, and business practise, and various subjects on technology, management and relevant subjects with several different vehicle manufactures. I moved into management at an early age. I moved around the country, at one time as a Regional Manager covering Workshops and Bodyshop’s, working for various franchises and my own business in the motor trade. 

Recently I have read and heard on the TV that garages are a rip off, which is rather a generalised statement to make. 

I will make some comparisons although not exhaustive of differences between car dealerships and Independent Garages. 

Vehicle Dealerships.

Cars and light trucks sold and marketed usually come through franchised dealers. However, what is the average start-up costs of a new car dealership? New car dealerships or dealers make up the largest part of the national retail industry. Franchise dealerships operate in conjunction with manufacturers, providing vital distribution and sales networks to help make vehicles available to the public, allowing the manufacturers to focus on manufacturing.

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Car Dealerships have usually invested millions of pounds into their businesses. Nearly all dealerships are independent from the manufacturer. In other words, the manufacture does not finance or own them. Self-financing frequently counts as the major funding method, and the dealer serves as the connection between the consumer and the manufacture. Car dealership businesses provide a range of services, in the main being sales, service, repairs, and parts.

The investments business owners must make for car dealerships divide into several parts. These include assets and materials necessary to operate the business. Investment usually divides into several components, including facilities and land, inventory and working capital. A dealership owner determines whether he must lease or purchase land, depending on his preferences and the convenience of terms. Facilities will include both a showroom and a service department. Inventory corresponds to stocking of new and used vehicles plus stock of mandatory levels of parts. Working capital is required for the ongoing business.

There are many mandatory expenses dictated to the dealer by the manufacture. A few listed below: –

  • Cost of presenting and maintaining the building and signage to the manufacture’s standard and specifications. This is likely to change with upgrades at the cost of the dealer.
  • Staff training in all departments including accommodation, travel and hotel expenses.
  • Stocking levels of vehicles and parts.
  • Technical tools and marketing equipment.
  • A networked computer system.
  • Audited manufactures standards that carry a financial penalty if failed.
  • Attendance of certain members of staff at specified key events.

A franchise dealer has set times by the manufacture for every single task they undertake and are charges at the labour rate x the task time. These are evaluated in ideal conditions by quality control and time and motion.

Independent Garages.

Independent garages will have the set-up costs of considerably less than a car dealership and probably not at the same quality and standards, neither dictated by a third party. Often, they are in rented buildings with technical equipment at the level they wish to operate at.

Points to consider when making comparisons between a car dealership and an independent garage: –

  • There is no monitoring of the competency of the staff that work on a vehicle.
  • Are the parts of genuine or adequate quality, and do they charge a realistic time at their labour rate for the work undertaken. Independent labour rate and allocated time for the job not governed as in a car dealership.
  • Is the vehicle serviced in line with manufactures specifications and standards?
  • Do they have the technical know how to diagnose and repair your vehicle in a timely manner? The time taken to diagnose if they are incompetent could be dearer than a franchise dealer due to the excessive time taken. Remembering a franchise dealer has set times by the manufacture for every single task.
  • A dealer often has the more expensive jobs to undertake as an independent garage doesn’t have the expertise, or equipment to diagnose and repair.

There very well could be a positive answer to the above considerations.

Evaluation of facts

As independents overheads are considerably less than a car dealership their labour rate is likely to be less hence lower charges.

It is unreasonable to accuse the car dealership or independent garage of ripping customers off, without definitive proof of the accusation.

The decision you need to make as the customer needs to be looking at the bigger picture before making a conclusion; maybe you are not able to due to a lack of technical knowledge.

I am not denigrating any garage or dealership, but I do become concerned when false accusations are made by non-technical people who do not understand the bigger picture.

I took my wife’s car to a tyre fitting shop last week and the tyre fitter shook the wheel and said your track rod ends need replacing. A total wrong way to check and wrong diagnosis was made. If that diagnosis had been heeded from an incompetent individual, unnecessary costs would have been incurred. He may have been sincere in his opinion but nevertheless leaves one concerned that he was able to make that statement and mislead the customer.

I have found and experienced very capable and competent independent garages who I have put my trust in.

The point I am wanting to make is that there are often reasons why there are differing charges between car dealerships and independent garages. So before making sweeping statements of either let’s consider the bigger picture: –

  • Is it like for like in comparison?
  • Is the competency level there for the work to be undertaken?
  • Can you trust the accuracy of the diagnosis?
  • Is the work guaranteed.

A point to note that by law the individual who works on your vehicle is liable for bad workmanship for ten years.

This is a very general comment and there are many influencing factors for consideration including the age and mileage of the vehicle.

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