Is it true that automobile dealerships make 75% of money in service and body shops and 25% is Market share?

Question

Auto dealership operations

Answer 1

Most make money in the back. Parts sales metal paarts to body shops account for a lot and service technicians like me would like to see you more often. Even oil changes and tire rotates. At the dealership level we have the manufactures technology repair your car better faster, and know the product too. Sales is break even the shop and parts is where the money is.Mechanics supply all there own hand tools and work for about 25% of the labor charged to the customer.

Answer 2

I know this much. Dealership service departments make their money on their labor rate which can be as much as 100.00 per hour depending on your location. The will also make their money on parts mark up.

On the other hand, body shops usally deal with insurance companies and the labor rate is a lot less than a service department's. I have heard a lot of complaining from body shop owners about how insurance co's won't get with the times and allow them a higher labor rate, puting them in the "poor house."

Dealership serivce is the "necessary evil" of a dealerships existence. If they aren't rolling cars out the door, their service departments are usally buzzing keeping the lights on.

Answer 3

In new cars it is not even close to a 25% margin. Dealers are lucky to make a 7% margin nowadays on new units.
Used cars are a whole different ballgame.