Service orders and profit have jumped at Garber Buick in Saginaw, Mich., since the store started offering credit-card applications and interest-free credit to cash-strapped customers.
When a service customer declines suggested repairs or maintenance beyond the reason for the visit, a store representative sits down with the customer to explain financing options, said Bobbie Herron, director of digital sales and marketing for Garber Automotive Group’s four Michigan stores.
If affordability is the problem, and often it is, the dealership offers to help the customer fill out a GE Capital credit card application. The financial services company often accepts or rejects the application within minutes, Herron said.
If the application is rejected, Garber Buick has arranged with CrossCheck Inc., a provider of check approval and guarantee services, to guarantee as much as $4,000 in repairs interest-free so long as the customer can pay the balance by check in a month, Herron said. The plan requires 25 percent of the bill to be paid upfront and the remainder paid within 30 days.
“It’s work that would have been denied because our customers didn’t have the funds,” she said.
Auto News doesn’t report what percentage of people who don’t have the cash to pay for car repairs and are rejected for a new credit card are typically able to pay off their new CrossCheck tab within 30 days, but it certainly has to be almost none. Any guesses as to what interest rate kicks in after 30 days? It can’t be low.
Hence, a more-than-100% growth in profits on a 40% hike in repairs:
Herron credits the financing initiative, launched three months ago, for a big boost in service work. Over the past two months, monthly repair orders have risen from 125 yielding net profit of $8,900 to 175 generating $19,750, she said.
And here’s the “work” of the car dealership, the labors that unleash such economic wonders:
Herron said the initiative grew out of a strategy session five months ago during which she met with Garber Buick’s general manager, Rich Perdue, and other employees to devise a way to increase customer-pay service work.”
The least surprising possible news from today’s New York Timess:
New legislation to pay for transportation is a priority for both parties because the nation’s Highway Trust Fund is nearing insolvency. Anthony Foxx, the transportation secretary, has said the trust fund could begin “bouncing checks” by this summer. That would force a halt to construction projects around the country, officials have said.
Note the equivalence between “transportation” and “the nation’s Highway Trust Fund.”
Driven by the rise of the millennial generation and a global growth boom, the auto industry is in the midst of a new golden age, said Mark Fields, Ford Motor Co. COO, in a speech at the Automotive News World Congress. The industry should take advantage of that to lure new talent, he said. Fields called it “the most exciting time for the auto industry in the last 25 years.”
Growth of small cars and luxury sales are pushing industry growth from different ends.
“There are 2.1 billion people reaching driving age in countries where the number of middle-income consumers is growing. These countries have huge potential for growth of first time buyers,” he said.
“Today the luxury segment accounts for 8 percent of the total global market,” he said. “Globally, the luxury market is forecast to add approximately 2.3 million vehicles in the next five years — with lots of opportunity in markets like China, the U.S., Russia, Turkey and Brazil.”
An exciting golden age, indeed! Is this how Thelma and Louise felt in their last 30 seconds?
[Source: Automotive News, January 14, 2014]
Clooney: “I had a Tesla. I was one of the first cats with a Tesla. But I’m telling you, I’ve been on the side of the road a while in that thing. And I said to them, ‘Look, guys, why am I always stuck on the side of the f**king road? Make it work, one way or another.’”
Musk: “In other news, George Clooney reports that his iPhone 1 had a bug back in ’07.”
This Elon fellow is one of the easier targets around. His ego must be immense, as he clearly can’t hear himself pratfalling. A bug? A bug is an annoyance in an otherwise functional product. A $100,000 car that repeatedly leaves you physically stranded is a bit more than a bug. And need we remind that “electric” cars are not new inventions? Quite the contrary.
And, then, of course, there’s that other bug:
Musk tries to excuse this one by pointing out that gas cars also catch fire. Of course, the average gas car that catches fire is over a decade old and worth about 1/100th of these Tesla bombs.
More evidence of the wisdom of moving a half-ton/14 cubic feet of advanced batteries around at highway speeds in order to power cars with coal:
As we continue to await Elon Musk’s ten-minute battery charge, it seems that his $70,000 boondoggles are liable to to be entirely destroyed by running over “large metal objects” in the road:
Love the excuses from Tesla’s damage-control department:
Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle. The car’s alert system signaled a problem and instructed the driver to pull over safely, which he did. No one was injured, and the sole occupant had sufficient time to exit the vehicle safely and call the authorities. Subsequently, a fire caused by the substantial damage sustained during the collision was contained to the front of the vehicle thanks to the design and construction of the vehicle and battery pack. All indications are that the fire never entered the interior cabin of the car.
The real story, of course, is that a commonplace under-car impact that would have caused little or no damage to a conventional gasoline-burning automobile totaled a $70,000 Tesla and put both its occupant(s) and fire fighters in severe danger, while creating a huge traffic jam, all thanks to the design and construction of the vehicle and battery pack.
Here is the Music Player. You need to installl flash player to show this cool thing!