It would seem like now is the perfect time to own a shop that works on cars. Vehicles on the road have never been older, but “older” in this sense means a car that was built in the early 2010s. These are cars that often require more specialized knowledge to repair than even my early-2000s car needs.
You won’t be surprised to hear that service is the biggest chunk of revenue a dealer is likely to earn, but the actual amount some dealers are seeing may surprise you. The Morning Dump is thinking about dealerships today, as the big National Auto Dealers Association annual conference is about to start.
Right now, you wouldn’t want to necessarily be a Volkswagen dealer, as that brand has been in rough shape. Could a name change for an existing model help? Maybe VW, as a brand, could learn from Renault, which has continued to find ways to grow in a challenging environment.
The most challenging environment in the automotive world might be Le Mans, and this year’s Goodwood events will have three of the most famous cars.
85% To 90% Of Revenue At Stake
Last week, I talked about how direct sales were a threat to dealers. This week, I want to talk about service. If there’s a commonality between both, it’s that dealers have long had a huge advantage that’s slipping away due to both consumer preference and technology.
There’s a piece from Automotive News talking about the importance of dealer service centers:
Service departments can generate between 85 and 90 percent of revenue for a majority of dealerships, Rick Wegley, an instructor and consultant at NCM Associates of Kansas City, Mo., told Automotive News.
“There is not a department in any dealership in America more important than the service department,” said Tom McCollum, chairman of the Audi National Dealer Council and CEO of Forbes Todd Automotive Group.
For most brands, margins on new cars are slim, and used cars represent yet another challenge. Service centers aren’t necessarily a slam dunk, though. There’s the ongoing technician shortage, and parts are getting more expensive, plus less foot traffic to stores means fewer chances to grab customers.
The older the car, the more cautious the owner, said Alan Dibre, chairman of the Acura National Dealer Advisory Board and dealer principal of Acura dealerships in New York and New Jersey.
“Customers are very cautious in terms of what their spending is,” he said. “You’re seeing less traffic.”
There are lots of concerns being voiced here, but this can still be a profitable business, as Car Dealer Guy reported last year:
According to Reynolds and Reynolds’ recently released Fixed Operations Golden Metrics, profit per repair order jumped for dealers in nearly all markets with some variation depending on volume levels.
- As of May, major urban stores averaged $414 per customer pay repair order (RO), up $33 year-over-year.
- Metro stores rose $23 to $349 in total, and community-based stores accrued $268—adding $9.
- Rural location gained $2 and averaged $225 per RO.
As always, there’s an upper limit to what someone with a 2014 Nissan Rogue is going to want (or be able) to pay for repairs. There’s also an issue of convenience. Bringing your car to a dealer to be told that it can’t easily be fixed now, and that the fix will be expensive, is a terrible outcome.
One growing solution is mobile service and more technology to reduce errors/labor needs, which automakers like Ford are pushing with its dealers. Here’s Bozard Ford explaining how it works:
Our strategy mirrors a hospital system’s model, that utilizes urgent care centers to manage less severe cases. Similarly, our mobile vans, equipped with Wi-Fi, handle minor issues like computer downloads or quick fixes directly at the customer’s location. This prevents these simpler tasks from occupying valuable bay space in our main service center.
This strategic division allows our primary service center to focus on its core strengths: major repairs like transmissions and engines, and supporting our used car and accessories departments. It’s an efficient approach that maximizes profitability. While our Quick Lane provides fast maintenance, mobile service extends this efficiency by taking an even broader range of services out of the shop, significantly boosting our overall capacity.
Perhaps it’s because I have an old BMW, but I’d be hesitant to take my car to a BMW dealer out of fear of what they’d tell me. I’m not sure yet what I’m going to do with my Honda as it ages out of its warranty.
VW ID.4 To Become The ID.Tiguan?
Volkswagen’s naming convention for its EVs is kinda terrible, right? The ID.Buzz, the ID.4, the ID.7. Whatever. Maybe you like it, but it’s such a shame when the brand has such fun names as Beetle, Tiguan, and Polo.
Oh, hey, speaking of Tiguan and Polo, VW already announced it’ll use the name Polo for its ID.2-sized subcompact, and there’s maybe a name change coming, according to CarExpert:
It’s expected the ID. Tiguan will follow suit with a redesigned cabin where the much maligned capacitive buttons and sliders will be binned. Like the ID. Polo, the ID. Tiguan should also feature the company’s latest touchscreen infotainment system with faster response times and an improved interface.
Under the skin, the rechristened ID. Tiguan will use a heavily updated version of the MEB architecture. Cheaper lithium iron phosphate (LFP) battery technology is likely to be adopted for some variants, with nickel manganese cobalt (NMC) lithium-ion batteries to continue in longer-range versions.
So ID.4 becomes the ID.Tiguan. It’s not clear if this will happen in the United States, but it makes sense. [Ed Note: ID.Tiguan is not a great name. Just call it Tiguan EV and be done with it. -DT].
Renault’s Five-Year Plan Is Working
Renault is the most interesting European automaker right now, and while my focus has been on the clever EVs they’re building, the long-term plan from the company was to shift from dependence on China and Europe towards emerging markets.
This plan goes back a few years to after the pandemic, and according to S&P Global, it’s working:
Among the expected outcomes of this plan is the launch of eight new products by 2027. Several have already been launched and have contributed to the sales uplift in 2025. A key product has been the Renault Kardian, a compact crossover that is based on the automaker’s long-standing CMF-B architecture. Renault highlighted the model’s contribution to the growth it saw in Latin America and a 44.8% y/y uplift in Morocco.
Another product contributing to this improvement is the Renault Grand Koleos. Built in South Korea and born out of the relationship between the French automaker and China’s Geely—from which this model sources the GEA—the midsize crossover helped boost Renault’s sales in South Korea by 55.9% y/y in 2025.
Overall, this has meant that sales in Renault’s international market represented a 30.5% share of its worldwide sales, up from 28.6% in 2024.
The whole world wants cars, but the whole world isn’t going to be buying electric cars yet. Being able to build cars for the EU market and emerging markets isn’t a giant business, but it ain’t a small one, either.
Goodwood Is Getting The Le Mans 1-2-3 Ford GTs
I don’t know if I’m going to Goodwood this year, but there’s at least one more reason why I’d consider it: The 1-2-3 finishing Le Mans Ford GTs from the 1966 24 Hours of Le Mans will be there.
For the first time in a decade, the three Ford GT Mk IIs driven by Bruce McLaren and Chris Amon, Ken Miles and Denny Hulme, and Ronnie Bucknum and Dick Hutcherson will not only appear together, but also run.
These legendary cars – chassis P/1046, P/1015, and P/1016 – will take to the Goodwood Hill during the Festival of Speed as the event celebrates some of motorsport’s greatest showdowns with the theme ‘The Rivals – Epic Racing Duels’. Entirely apt, as 2026 marks the 60th anniversary of the intense battle between the combined forces of Ford Motor Company and Carroll Shelby’s Shelby American, and Ferrari.
In September, the trio will reunite once more at Goodwood Revival, where they will run on the historic Motor Circuit, offering fans a rare chance to witness these icons in action.
Sweet.
What I’m Listening To While Writing TMD
I just learned that the opening orchestral sound from Portishead’s “Mysterons” is from a British TV show called Captain Scarlet and the Mysterons. There is just so much incredible and weird puppet-based TV from the ’60s I never knew existed (I learned this from Bandsplain, FYI).
The Big Question
Who was the last person to fix one of your cars?
Top photo: Ford
The local belle Tire to replace/reprogram the failed TPMS sensors in my Civic Si. It was $99 I can’t buy the programmer for that price, not to mention I don’t have the requisite tools to install new sensors etc. Plus the fixed the slow leak in my passenger front tire. They spent like three hours on the job from what I can tell, and It’s been solid ever since.
They gave me a free oil change when I bought my used car, so the dealership did my last service. Before that, though, I swapped out my simultaneously leaky and clogged heater core.
I have no issue taking my car to an indie to do work I’m capable of but just don’t wanna do.
For the hell of it I asked them to do a trans service, they would sell me the parts for $1k, but wouldn’t do the work because it’s “lifetime” even though the manufacturer of the trans says it should be done at 70k. Indie, using the same OEM parts, was $500 for the integrated pan/filter, and $100 less an hour in labor. A brake job on my wife’s 10 year old car runs about $2k per axle at the dealer when OEM parts from a third party are no more than $500-800. So, maybe dealers could consider being a tad more competitive?
Me. I have 28 entries by me for just 2025 in my service spreadsheet for my manual 2003 Subaru Legacy, and much of it would probably be considered overkill, like replacing all the worn shifter parts (even though it was shifting pretty good) and completely rebuilding the calipers because I bought the OEM complete seal kit after finding a bad slide pin boot. Now I know exactly why brake pistons get too stiff to be pushed back by hand after seeing the dirt/rust? stuck to them that needed cleaned off them that a mere brake fluid flush won’t fix.
Me, last person to fix one of my cars.
But currently trying to bribe my next door neighbor to do the over due oil change for me.
Current wind chill temp is barely 20 degrees.
Of course bloody knuckles tend to freeze closed pretty quick at that temp. YMMV.
The last person to fix one of my cars was me, front suspension sway bar links redid, bushing on one of them was completely gone so…it was time, but dang it handles bumps so much better now!
That mobile service Ford is talking about sounds like a step in the right direction, going to the dealer for something minor is such a hassle, especially where we live and 15 miles away = at least half hour drive through traffic, closer to 45 minutes, so hour and a half just in travel, nevermind if you’re leaving it there then that’s 3 hours of travel in dropping off and picking up.
I just picked my JKU up from the dealership last week. It was for 5 new TPMS, O2 sensor and rear main seal leak. $200 because it was all under warranty. it is a 2012 with 178K.
I scheduled the 30k service for my Mach-E (really just a light inspection and a tire rotation) and the dealer offered mobile service to do that as well take care of some firmware updates for a couple of minor recalls.
They came out the next day and knocked it out in 30min. Best of all, Ford has a rewards program when you buy vehicles, and you can use those points for services. I’ve been coasting off those points the last 3 years I’ve owned the car, and haven’t had to pay any extra for service. Sure, EVs don’t need much service below 100k miles anyway, but it’s nice to actually see that lower service cost in reality.
Maaan, I took a rip in my buddy’s new Mach-E yesterday. What a fantastic piece of kit.
His isn’t even the GT model (just GT appearance pack) and when he pulled on to the street and punched it, I just started laughing uncontrollably.
EV acceleration is just so otherworldly.
Also, his is the highlighter yellow, which is STUNNING.
That color is my favorite Ford offering.
If I was needing to buy something EV the Ford would get a good look.
I have the GT, and when driven in anger, it will handily embarrass all manner of sports cars. On the flipside, it seats four adults very comfortably and has plenty of cargo space for a family vacation. It’s been a great car, and I plan to keep it until the wheels fall off.
I just did the 20,000 on my MME. Love the car so far. I only use it for commuting to and from work and around town errands. Electric may not make sense for everyone. But for my needs and the fact I can charge at my office for free, it does. I figure I have saved at least $2000 in the first year of ownership.
I wanna say I was the last one to work on my car? Sometimes I just have a co-worker work on it because I’m lazy and I had the money. Or I was just not comfortable doing the job because I lack experience like my master cylinder & booster taking a crap.
I’m gonna do my oil pan at some point though. It’s rusty and I’m going to do it when I do my next oil change. And I’m probably going to need brakes again: I have a caliper that’s been heating up more than it should be, and I can tell my free-but-cheap brakes aren’t really the greatest.
I also have some accessories to install but I’m not in this snowy weather.
My RAV4 is still under ToyotaCare, so I let them change my oil and put on my spare when I got a flat on the way to work (so frustrated that I had to replace my tires at under 15k miles, but that’s another issue).
Last real work I had done was warranty work on my Niro, and that was a mess. I’ve thought about going back to a used vehicle and doing limited repairs myself (tiny garage and very little space I could otherwise use) and taking it to an independent shop for anything else. I know someone who owns a good, honest shop, so I don’t worry about how hard it is to find a good repair shop.
Looks out the window at the 23 and 13 year old Hondas buried in snow. I dunno man, keep driving it? Keeping it going will AWLAYS be cheaper than replacing it, and it’s a Honda not a VW or BMW…
Does he mean revenue? Or margins? Because later in the article, they mention the average repair is about $400 – and with the average car sale being somewhere between 15k and 35k (between used and new), I’ve gotta imagine that the actual metrics being compared here are margins on new cars vs. gross revenue in the service department, unless 60 cars are cycling through the service bays for every car getting sold at the dealer.
And how much of this is driven by specialized OEM procedures that third parties cannot undertake? Like, I rarely take my cars to the dealer, but I did have to bring a BMW in as their explosive battery disconnect (literally, that is what it is) can only be serviced by the dealer (and annoyingly enough, the 5VZFE starter contact kit for my old Toyota is also a dealer-only part). With the advent of more complex body work that includes lanekeeping and other safety system sensors, how much of the revenue is being driven by insurance?
I think it’s a fascinating stat, but I wish that the details had been dug out a bit further.
Yeah, I suspect that it’s 85-90 percent of profit, rather than revenue. Really shocking stat if it’s actually revenue.
And, yeah, I’d love the breakdown of how this works. Warranty repairs have to be a big driver, and things like ToyotaCare or service contracts probably drive a lot of oil changes and such. I’d really wonder how much of their business is actually out of pocket for the customers. And whether the margins are much higher when they’re charging the manufacturer, as I suspect is the case.
Good points. Something that gets overlooked in a lot of direct-to-consumer sales discussions is that the mandatory dealer presence was viewed as a consumer protection when the laws were passed, as the goal was to ensure the manufacturer had a local presence to provide parts and repairs (otherwise a consumer could have a warranty that would be nigh-impossible to make a claim on if the consumer had to drive 500 miles to a neighboring state). So how much of it now is dealers charging for maintenance on cars that the dealership has sold or dealerships collecting on manufacturer money for warranty claims, as you noted?
I’m also seeing a lot of people seeking to operationalize their lives (in more than just cars), which manifests itself in people still taking their 2010-era jalopy to the dealers on the regular.
From what I understand based on technician gripes online, Warranty work tends to pay poorly since it’s all book time of manufacturer book times with effectively minimal markup on parts, so it tends to be not all that profitable, at least for technicians. The complaints seem heavily geared towards Ford and Stellantis from what I’ve seen, so that may just be a bigger indictment of those brands than the overall margins of warranty work. And having personally worked on Fords from multiple decades, yeah I’d hate to be a Ford tech too.
Good to know. I sort of suspected the Kia dealer that took too many tries to remedy a clicking solenoid in my charging port was milking the warranty system, but I guess they were just that bad at diagnosing and repairing. Which lines up with the other problems.
My experience in the industry is that warranty does not drive profits much at all. Dealers only do warranty work because they are required to by the franchise agreements. OEMs set the time that will be paid and the parts and prices that are covered. Warranty time is typically around 70% of standard book time. Most techs freaking hate warranty repairs because they make so little. Its one of the few areas dealers have no leverage against the OEM.
I’d venture a guess that half of us are also Shoveltopians today. Stay warm, all.
Had to shovel four times yesterday, I’m raging at the tiny flakes currently falling.
Ditto. My back is aching and the sleet at the end of the day didn’t help my mood.
Having two 20yos living at home is sometimes convenient. Getting them out of bed to hit the shovels can be a chore but not too bad. Now if a plow could come down the street I could more easily leave the neighborhood. Although that also means I’ll have to clear out the end of the driveway again.
last year I brought my 2011 Tiguan in to the WV dealer for an oil change. They wrote up $14k in other repairs needed. car was only worth $4k. sold the car
I fix my cars. Paying someone else takes all the thrift out of driving cheap cars. That said, I removed the HVAC controller and programmer from my C4 and sent them off to be repaired by people that know how to fix such electronics. The programmer was so terrible to remove that I wish I had paid someone else to do it but I got it eventually.
My DD still has some CPO warranty coverage so the last few repairs have been at the dealer. Last repair was a battery heater causing HV isolation faults. Not a terrible fix to DIY but just as well I didn’t have to deal with it. Got an appt later this week to see if they will warranty-fix some worn trim – I won’t be upset if they don’t and I’ll DIY it.
None of my other cars have a warranty anymore so I do all the work I can. Last non-warranty fix was a trans cooler line that rusted out on my MKZ, before that it was a broken strut spring (replaced both front assemblies). Also a failed clutch slave on the 86 Vette. Always fun times when having too many cars.
There’s a handful of auto dealer chains like Penske that are publicly traded and thus have to report financials broken down by sectors of the business. They typically show parts and service profits in the range of around 30-40%, making them the most profitable parts of the business.
Technically me. Installed new struts on all 4 corners of a 16 year old Subaru, but I paid $150 to have it aligned. All the align it yourself methods seem to take half a day and lots of them use a $700 tool.
Found issues with the $500 brake job I paid for because of an emergency in the middle of a road trip while doing the install and it just cemented my trust issues of why I don’t pay others big bucks to do a half assed job.
No one cares more about your property than you.
There is a new(ish) tool called a Gyraline, that relies on your smart phone. Video comparison of it against a high-end laser alignment rack:
https://youtu.be/A0Cd1eWdnk4
This. But not to brag but over 55 years have gotten to where I can visually do an alignment by eagle eye only. Always take it in to be confirmed by a pro, but they are amazed by how close I can eyeball it.
Most of the time there’s no charge either.
Appreciate the recommendation!
I’m in the middle of some relatively minor suspension work on my husband’s i3. I’m DIY’ing this job precisely because the car is coming due for service; it only requires service every 18 to 24 months or so, which means that every time we take it in, BMW looks for as many high-ticket items to bill us for because otherwise they make no money off of us. Usually it’s at least tires; this time around, I knew it needed this suspension work, and I’d rather spend a couple hundred bucks in parts and do it myself than pay the dealer $1K+.
Was sitting around waiting for an alignment and hearing all the bullshit they find to pad bills for other customers is sickening. I think they didn’t bother with me since I DIY’d the struts they were aligning, but it sure felt like they just find marks and keep seeing how big they can get the bill.
They were asking a customer if they wanted their tires siped (people still do that?) in an environment that gets no snow or ice so a complete waste that would actually make the tires worse in the primarily wet environment we were in.
Obviously, tariffs are an issue, but the various little Renault EVs are seriously desirable to me. A cheap, stylish, interesting, runabout EV could be the perfect pairing to America’s big-dumb-cuv craze. Basically, an electric Honda Fit would make the perfect second car for a majority of the country. The Renault Twingo seems to me to be a better styled EV version of the Honda Fit, and I want one.
TBQ: Me. I did ignition coils this passed summer.
My local mechanic, at a NAPA service center in my town, fixed the fried clutch bearing in my FR-S. Other than that, I did change the oil in my brother’s ’02 Bravada. Planning on doing maintenance on my VW Beetle it ever gets above freezing.
I have a local independent shop (just one guy) that handles the rare thing I’m not willing to tackle myself, but he’s been a month + out for things the last time I talked to him, probably a sign of cars being kept longer. I have on rare occasions used the dealer for things, typically that needed to be done when I happend to have a recall come up (an alignment is the last thing I remember paying for at a dealership roughly 6 years ago).
Me
Last time was at the Acura dealer for a warranty fix on a refrigerant leak in an AC line on my Integra. Dropped it off on a Monday morning, got a loaner ADX, picked it up Tuesday after work. No fuss, no hassle. I told them not to wash it and they didn’t, which is a plus.
One time I specified don’t wash it, which they honored, but forgot to specify don’t do anything to the interior… they armoralled every touch surface there was. Having a goopy steering wheel is the bane of my existence.
Damn. Anybody who would put armor-all on a steering wheel, of all things, has no business coming near a customer’s car.
The last hands to touch our 2015 Odyssey was an indy shop a couple years ago (TB, water pump, tensioners, engine mount) because it was one of those things I didn’t have a whole weekend for, plus the 25% chance I’d need to take it to the shop anyway when I messed something up.
Other than major service or weird repairs, I try to DIY almost everything. The economics of paying to have older cars fixed is pretty crazy, but it’s part of the price we pay to keep reliable transportation. It’s not a capital improvement, it’s almost all just maintenance (unlike a home, where spending ~10% of the value of the home on a major repair can often be recouped through resale, with everyday cars it’s normally dust in the wind).
The other end of the spectrum is trying to get unusual parts for 20+ year old cars. I would have already donated or sold my ’01 Passat, but the lower dash is in 10+ pieces and I’m trying to wait on a junkyard to show one available. As it stands, I probably couldn’t sell it, but it’s there as a backup car and costs almost nothing to keep.
This is the way.
My 2009 Scion xB has bottomed out on depreciation, and is seeming to go up in value as time passes.
On the other hand been looking for another vehicle as a back up.
There are custom places, mostly for sound systems that can replace dash parts if you have one in the area.
Demand for my truck’s weak dash is high enough there are better replacement parts aftermarket now, though I’m okay for now.
My 1500 4WD has no dash left, but thing is, I don’t care. It only needs to run.
Naked interior makes a change anyway!