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Everything is going to the subscription model, software, groceries (Amazon's "buttons"), you name it.
It's already here with cars - just look at how fast leasing is growing. The next big thing will be used car leases (CPOs for the payment buyers who want even lower payments).
Durable goods like washers and refrigerators used to last an easy 20 years and they were repairable without breaking your wallet. Makes good economic sense for the consumer but I bet even Dave Ramsey likes getting the newest shiny stainless steel French door stuff and pedestal washers every 6 or 8 years now. Next up will be "self-driving" washers and we'll all want to upgrade anyway so our frig can remind us to grab milk on the commute home (I joke - actually the frig will call Safeway and a gallon will be delivered....).
The average age of cars on the road is 11 years. Place your bets - my guess is that the sales bubble of the last two years, together with the high cost of repair that will make it too expensive to fix the old ones, will combine to take a couple of years off that average.
How can dealers offer end of year discounts that are 10-20% off of MSRP? (on top of factory assistance) Tell them good luck with that without techs that can repair the turn-ins. Try five years for a Whirlpool Duet front loader. Bearing failure that requires all of the drums to be replaced since the bearing that fails isn't supposed to be serviceable separately. The washer cost just short of $800, the estimate to repair it is just over $1000. I'm fortunate that it's easily within my reach to get the parts and fix it if I choose to, but that's still over $300. Just wait until $30,000(+) cars are treated the same way. High cost of repair? As compared to what? A washing machine that at five years old costs more to repair a bearing failure than the machine cost? Imagine a $60,000 Tesla needing an $80,000 repair when it's five years old. No warranty, no help from the manufacturer or the dealer, no recalls, no trade-in, just throw it away and figure out how you are going to pay for the next one.
BTW, you keep ignoring the fact that leasing doesn't solve any problems unless there is a viable resale market to absorb the rest of the vehicle cost. If that doesn't exist then the first lease has to pay for 100% of all of the vehicle's inherent costs, and future leasing prices will reflect those costs.
Because they make a bundle selling the clean, late model used ones. Who goes to the dealer for service? Owners of cars under warranty. Those cars are easy to CPO.
>How can dealers offer end of year discounts that are 10-20% off of MSRP? (on top of factory assistance)
Invoice is pretty much a meaningless number these days - MSRP always has been.
>Tell them good luck with that without techs that can repair the turn-ins.
There will be no resale market after ten years - the "old" cars will be recycled. When I was growing up, a running ten year old car was an anomaly, so we're just going full circle. A $30,000 car that last ten years is going to cost $3,000 a year for the capital expense. The cheapest leases typically go for $199 a month or $2,400 a year, and that's for a $18,000 car. So we're there. The five year old Tesla will get CPO'ed with a software refresh and maybe some new battery cells (probably not though). And that's how you absorb the "rest" of the vehicle cost.
Be right down your alley Doc, since you enjoy messing with Whirlpool bearings as much as cars.
http://www.baierlford.com/hot-list/new.htm?tcdkwid=106140214&tcdcmpid=438681&tcdadid=118890139768
10,500 miles a year. Yea right, I'd need to have six cars to not have the mileage exceed the limits. The Fusion is only $1995 down plus tax etc. The F150 is $4495 down plus tax etc, So you "walk" down to the dealer and have a choice between a CPO lease and a new car lease. The difference is negligible when you get to the bottom line. Do you really think there would be a market for the CPO?
Yeah, I do think there will be a market for a leased CPO. The CPO will be attractive since it should be more car for the money vs a new one at the same payment, since the depreciation hit is partially eaten up. And even though it's used it'll have an extended warranty and maybe free loaners or free service.
And the CPO gives you that all important, infallible 184 point inspection that you just can't get on a used Craigslist car
Maybe you don't agree that buyers should get a PPI before buying a CPO car, just like any other used car, but I often recommend that as cheap insurance.
The trick of course, is finding a good mechanic and then trying to schedule something on short notice.
There's one exceptional home inspector I'm acquainted with. He's a journeyman with a license but likes the inspection business better. Depending on the size of your house and the number of issues found, you'll wind up with a 50 to 150 page report that's really a checklist of what's right, what's wrong, what needs to be address immediately and what would be good to have done, but something that's not a health or safety issue.
The nice thing about his job is that he's not selling his own construction business and he's not finding stuff wrong and recommending that his friends work on your house.
I don't see the same separation happening with car inspections, always seems to be a conflict of interest.
Now you, you could start a trend.
As far as the home inspector goes, how much does it cost him for the tools of his trade? How much does he get to charge to do one inspection? That's just two questions and the answers reveal there is no comparison when it comes to the cost to do the work in tools and schools and there is really no comparison as to the rewards for doing it.
Think of this comparison one more way. Which of these two jobs can really be learned in a week, and which one isn't finished being learned after forty years?
http://www.autonews.com/article/20160905/RETAIL07/160909952/1147
Read everything, especially Coker's Tips...
ON RETENTION
Be creative to retain valuable, qualified technicians. Consider flexible hours or unusual shifts, like four 10-hour days a week. “We have got to find ways to put some handcuffs on these people.”
That's an odd way to try and keep the best techs from leaving the dealership, let alone the trade.
Ways to do that include having lower-paid employees keep the service area clean and deliver parts to technicians from the parts department, Coker said. Junior technicians also could handle routine maintenance while “A”-level technicians concentrate on more profitable and more highly skilled jobs.
“How can we keep him in the stall, doing $110 in gross profit-per-hour stuff?” Coker said. He said dealerships also should consider hiring retired A-level technicians part time, to work with and train entry-level technicians, instead of having full-time senior technicians do it.
Routine maintenance performed by junior technicians, that makes sense. Too bad that a viable career path doesn't really exist to take those junior techs and grow them to be the next generation of top techs which he does try to address with the next comment.
Coker said an average figure for productivity is 59 percent. “It’s never 100 percent,” he said, because of bathroom breaks, meals, etc. However, dealerships should minimize avoidable downtime — for instance, the time technicians spend getting parts from the parts department, he said.
Efficiency is the number of so-called flat-rate hours a technician produces, divided by the hours spent working. That ratio can and should be more than 100 percent, Coker said.
By now you should realize that with the discrepancy between customer pay hours and warranty rate hours, being more than 100% efficient can be an extreme challenge for all but the most elite of technicians, and even they have to deal with challenges that come with newer vehicle designs and technology. You can't learn what they need to know in a classroom. Only by getting first hand experience with each vehicle and system can one gain true comprehension of the work.
Automakers pay dealerships a fixed number of flat-rate hours per job for work done under warranty. If the technician finishes faster than the allotted time, the dealership keeps the difference — and the technician can end up working more than 24 flat-rate hours a day, Coker explained. He said average efficiency is about 180 percent.
He clearly doesn't know how poorly warranty hours pay as compared to customer pay and even then his math is a little fuzzy. If "average" efficiency is 180%, then the techs would be turning 14.4 hours. A tech would have to hit 300% efficiency to break 24 hours. The facts are, there is "some" work that can generate that kind of efficiency, but it isn't anything that is done under warranty. Then when there are demands made,such as PMI's for free which are lost time against the productivity part of the equation, even hitting just 100% means pushing ones-self to the max, all day long.
His tools are his smartphone (for scheduling and pics to document issues) and his laptop and he belongs to a certification organization. He has a proggie for doing the inspection ($1,000?) and the usual office tools, ISP, etc. Work tools include a temp sniffer for the HVAC vents, a simple short/neutral/ground tester, good ladder, and a few hand tools. And the obligatory pickup of course.
He's not one of the fly-by-nights who takes a short course and hangs out a shingle. He had at least decade of experience with construction and pulling wire. He's knowledgeable and his skill set is a lot different from the "tech" who takes a day of training to learn how to change someone's oil. On the flip side, house tech doesn't change much from decade to decade.
I take the "handcuff" comment to mean that the dealer or shop owner should make a tech's working conditions and pay so lucrative that the tech never seriously considers hunting for another job somewhere else. A good thing, in other words.
My wife had 10 jobs in 30 years. A good sneeze could cause her to walk out. She might be stuck driving an '82 Tercel but she could walk.
How many guys do you know who can't quit because they still owe Snap-On three more years of payments?
Here is another quote from that article.
ON RECRUITING
Fish for technicians wherever the fish are. That includes quick-service franchises, vocational schools and wherever recreational vehicles and boats are serviced. “A lot of RV dealerships, their technicians are not inside. Their technicians are working outside, and in Southern California and Florida, obviously in the months we're in now, it's an uncomfortable situation. They're not in a climate-controlled situation.”
Only a few techs are in "climate controlled situations". There are more now than there was in the past, but the old line of "The heat is in the tools" still applies to many shops that don't even heat the repair bays in the winter, let alone consider putting AC in the shop.
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
PS: I don't think so....
See if THIS WORKS for you.
Best learn coding so you can fix autonomous cars.
The dichotomy is having zero accidents, but who would want to live in such a world where there is no driving, and no appreciation of the character of cars?
What dealers need to worry about in addition to semi-autonomous cars, is how people will buy cars in the future.
I wonder who is going to repair all these "autonomous" cars? They can't even fix Stabilitrak
A much more serious challenge is that the autonomous car will be programmed on the "careful" side, and humans will not let it merge, just like they try not to let other humans merge. So occasionally the car will have to sit there all day. You can't fix obnoxious.
There is no computer on earth that can out think a human brain, chess games notwithstanding. If one's brain is pretty much dimmed down anyway (bad driver), the autonomous car might pick up things that this lazy brain wouldn't even notice, or perform functions that the lazy brain is really no good at.
Conversely, the attuned brain (attunded to driving) is going to handle complex, multi-directional, multi-dimensional situations much better.
Cases in point are plentiful---consider what sometimes happens to airplanes that attempt to land on auto-pilot; or split second decisions made by pilots that computers could never calculate.
In HPDE events they teach you to look where you want to go, your hands and steering wheel and car will naturally get you there if you use your eyes as a direction.
You will always need driver input--so, given the variance in driver skills at the get-go, bad drivers will drive autonomous cars better than they did with their old cars, because they were clueless to begin with, and good drivers will get lazy with autonomous cars and lose their "edge" in emergencies.
The main reason that she called was to sell me some of the advertising programs which supposedly would get more of the inquiries they are tracking to turn into calls. Funny thing is while for a number of the vehicle owners it probably is just what they need, me being the one to take car of their car, but I'm just not looking to do more work, and if I was I'm definitely not looking for it to be sent to me from their site. I don't agree with a number of their policies and how they are more in a position to do things to us, than they are for us and to pay them for that just doesn't make any sense. Do you know what the worst thing that would happen if I did advertise with them and grew some business that way? I would legitimize their operation in spite of its inherent risks. Saying no to spending money on them is the only real protest of them that is available to me. Well, other than writing this that is. In a way, its kind of like AAA. They didn't earn their reputation as an automobile authority themselves, it was the shops that actually provided the services they contracted that deserved the credit they claimed. Yelp is little more than a variation of the same old song just in a different setting. If consumers found me through Yelp, then they would get to reap the benefits of the work that I do and for that they should pay me, not the other way around.
AAA made their reputation with me by opposing bike paths. No one needs their maps anymore and it's faster just to call for a tow yourself or call a cab if you need a jump (wonder if Uber drivers offer that service too).
I pay $10 a year extra on my car insurance btw, and I'm way up on the game with my towing reimbursements on my last van.
One reason I do not automatically admire a wealthy person is because I want to know how he got there beforehand. Making money off other people's backs does not elicit my respect.
My local BMW dealer is richer than my friend who runs his own Porsche-Audi shop, but the way my friend treats his customers and his techs is, IMO, far superior.
I still have in my files an invoice from BMW given to a friend's wife. Her phone quit working in her car's integraqted system, and being a pediatrician, she drove right to the BMW dealer.
An hour later she got her bill, and it says:
Diagnosis:
Phone inoperative
$108
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive