It’s almost that time of year again isn’t it, and I am not talking about Slade records in every store, office parties on every corner, and not forgetting the overly large chap with the bushy white beard. Oh no, it’s far more important than that (for us motor dealers anyway.) The dreaded end of year accounting is almost upon us, did we make a profit? Or sadly, as some are about to discover, was it a big fat loss?
With the economy and motor industry pretty much in freefall over the past couple of years, coupled with today’s cars stuffed full of every imaginable electrical gadget possible, with even the most basic having at least one ECU (“electronic control unit”) it is no surprise that some are reporting losses on sales with regard to “out of warranty repairs” on an unprecedented scale.
This is especially true in the used sector (which outnumbers the New Car Franchise’s three to one) and where a very high proportion of consumers will buy their next car. With most manufacturers now giving a three year unlimited mileage warranty it is left to the used sector to pick up the pieces when trouble occurs outside of this safety net, and when it does (which is often) it has a devastating effect on profitability. Having had some truly eye watering problems in our own dealership this year we decided to do a bit of research ourselves with regards other well run establishments to see if it was as widespread as we feared.
The findings were sadly as we predicted and below are just some of the real problems and their related costs that we came across. All were on a wide range of everyday cars from popular hatchbacks to 4×4’s to luxury saloons, and whilst it was a given that many were French products there was an alarming trend with so called “Blue Chip” manufacturers, who were once excluded from such findings but now share parts with the less reliable of the industry. So here are just some of the many profit draining stories we have heard from dealers and customers alike in 2009.
1. Windscreen washers stopped working on 2006 Swedish Vehicle, linked to the ECU and come in cassette switch package. £540+VAT (Trade) for the part plus Labour costs.
2. 2006 German Auto went into limp mode THREE times before cure, off the road over three weeks; three diagnostic call outs at £60.00 a time plus eventual part (Control Unit at £736.00) plus VAT and labour costs.
3. 2005 Japanese small hatch that used to be bulletproof, engine management light + electric power steering fault, over a £1,000 was spent putting this car right again for the customer, Electric power steering faults becoming much more common across the range.
4. Mainstream family car that suffers continuously with more faults than should be reasonably expected, manufacturer should be bought to task over the appalling build quality, (and it’s not even French!) too many complaints to list here, but most used dealers avoid if possible because of the constant problems and uneconomical costs to repair. One 2005 example had been to no fewer than three separate garages with the very latest diagnostic equipment, two months later the vehicle is still not fixed and parts exchanged now running at over £700.00 dealer is at the point of offering a full refund just to be out of the headache.
5. Airbag, ABS, Engine Management, Bulb Failure, and the ridiculous tyre pressure monitor lights that refuse to stay off after being diagnosed and reset even when there is no detectable adverse affect on the vehicle, most common customer complaints on modern vehicles and now becoming common knowledge in most workshops.
6. Electric driver’s seat fault on mainstream volume manufacturer that regularly fails and requires complete replacement at ridiculous cost. (Second hand units around the country are like gold dust, find one if you can!)
7. Well known 4×4 that suffers multiple head gasket failures, transmission problems and uneven costly tyre wear, plus terrible build quality, but still sells incredibly well. This is known in the trade as a “boomerang sale” for obvious reasons.
8. Many 2006 onwards (and some earlier) vehicles that require the complete bumper assembly to be removed in order to replace failed headlamp bulbs, not forgetting the “Bulb Failure” light on the dash needs to be reset and some of the new “pure white” gas filled bulbs can themselves cost upwards of £60.00, we found one that was £124.00+VAT from the Main Agent! Yes that price was correct, for a bulb????
All of these are just a fraction of the stories and complaints we have heard. If we included all the complaints against some French products this column would run to many pages, and for every one of you who can vouch for your “totally reliable” French car there are literally thousands of consumers out there who wouldn’t agree with you, in fact we know of some dealers who refuse point blank to take such vehicles in part exchange no matter what the deal!