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Dealers make little money off sales these days. Basically just a finders fee if they sell you financial products. When it comes to ICE specific stuff dealersh

Dealers make little money off sales these days. Basically just a finders fee if they sell you financial products. When it comes to ICE specific stuff dealerships basically only do warranty work. Engine specific stuff is a minority of warranty work because power-trains are generally much more dialed in (and last the warranty period) than the special HVAC flapper that has to be redesigned for some specific model to reduce space usage so they could fit a redesigned glove box without designing a new airbag mount. Indy mechanics are the ones replacing exhausts and head gaskets. All mechanics do an easy 10:1 (probably closer to 50:1 ratio) of changing wear items compared to fixing leaks (the primary source of ICE maintenance). By the time 100k timing services and whatnot roll around most cars are in the hands of people who are taking them to independent mechanics for budgetary reasons. While the HN crowd can justify the cost of having that stuff done at the dealer for peace of mind your average person is taking those jobs to an independent. The switch to EV is not going to strongly impact the kind of service the dealers do the most of. It's too close to call whether the reduction in the size of the warranty work ball and chain will be larger than the reduction in gravy timing jobs and exhaust repairs, in any case it's not a massive net difference. The reason you see people on the Tesla and the Bolt forums (or HN) with their claims of insanely low maintenance costs per mile is selection bias. The early adopters have other cars for other tasks. They (mostly, I'm sure someone's done it) aren't renting the Uhaul moving trailer to put behind their Model 3 because they have other better options available. They tend to live in nice suburbs with nice roads and mostly commute with their EVs. With that kind of use most of these vehicles aren't wearing out fast. It's the closest thing a commuter car will get to a "church and bingo" usage pattern. When EVs get in the hands of the "rolling negative equity into a Dodge Journey/Nissan Altima" crowd and get used and maintained that way the maintenance costs are going to look a lot like the ICE vehicles they're replacing in that role.

sokoloff 6y ago
> ICE specific stuff dealerships basically only do warranty work Dealerships probably do quite a bit of oil and filter changes as part of annual service. Since every car needs those and many owners of new cars want to take it to the dealer (for whatever variety of reasons), they make a lot of money off these services. I do all the maintenance on our family cars, subbing out only paint and tires. My electric LEAF has needed wiper blades and washer fluid in 20K miles and 6 years [it did need a warranty battery repair in year 4]. In that same time, my wife's CR-V (which is generally low maintenance among ICE cars) did about 30K miles and needed a clutch, a set of brake pads, a power steering pump, a belt tensioner and serpentine belt, an alternator, 6 oil changes, plus wiper blades and washer fluid. Some of those were wear items (and last more than 5 years [clutch/alternator]), but the difference between an even traditionally considered low-maintenance/high-reliability ICE vehicle and a low-end electric was much greater than I expected. My parents' experience (with two electrics and a single diesel) is similar. The electric cars need much less intensive and much more predictable maintenance.
- throwaway0a5e 6y ago
  >Dealerships probably do quite a bit of oil and filter changes as part of annual service. Those are typically break even or loss leader. >my wife's CR-V (which is generally low maintenance among ICE cars) did about 30K miles and needed a clutch, a set of brake pads, a power steering pump, a belt tensioner and serpentine belt, an alternator, 6 oil changes, plus wiper blades and washer fluid. And were you not doing your own maintenance would you be having a dealer do that stuff? Exactly.
  - sokoloff 6y ago
    No, I would be having a much less expensive independent mechanic doing that stuff. But I care about how much I spend on my cars. Most of my friends seem to think "my car has a badge X on it; I always take it to the X dealership; as long as they charge me less than $1000 per visit, I don't think about it" which is crazy to me. They think $700 for a single-axle brake job is a reasonable price to pay. That's how dealerships eat because there's a lot more people who act that way than act my way.
    - throwaway0a5e 6y ago
      I don't think your friends are representative of the average car owner but maybe they are. Time will tell.
snarf21 6y ago
I'm sorry but you don't understand how dealerships work. You seem to think the only amount of money they make is the difference between their price from the factory and the final price you pay on the invoice. I agree this number is small but that is not where the profit comes from. They make far more from the financing which today sees people getting 7 year loans to pay for a $65K SUV. They also make a ton from selling extended warranties and other add-ons, and they push this stuff aggressively (sadly). Additionally, they make quite a bit from reselling used cars. There is a lot of obfuscation in how much you get in rebates and knock-downs versus your car's "trade-in" value. The "real" acquisition cost of a used car is far lower than you might think. (One trip to a dealer's car auction will set you straight.) The markup on a used car can be far more than a new. They could sometimes make 25% or more plus they are still going to sell a lot of people extended warranties since the factory one is almost expired. Additionally, parts and service make quite a lot since, as you point out, upper middle class people "trust" the dealership and pay 3x the cost for most vehicle services. (Source: my dad has been selling cars for over 40 years)
- throwaway0a5e 6y ago
  Are you disagreeing or nitpicking? Pretty much none (well I guess the salesman will have a harder time throwing in free oil changes to seal a deal) of the "time of sale" stuff is effected by the switch to EVs though which is why I didn't bother to cover it in depth or make a new vs used distinction. Only a subset of service is affected. Yes, dealerships make a lot of money on service but they also waste a lot of bay-hours on warranty so it balances to a degree. Dealerships aren't so lean that that a reduction in service will sink their entire business model.

sokoloff 6y ago

> ICE specific stuff dealerships basically only do warranty work Dealerships probably do quite a bit of oil and filter changes as part of annual service. Since every car needs those and many owners of new cars want to take it to the dealer (for whatever variety of reasons), they make a lot of money off these services. I do all the maintenance on our family cars, subbing out only paint and tires. My electric LEAF has needed wiper blades and washer fluid in 20K miles and 6 years [it did need a warranty battery repair in year 4]. In that same time, my wife's CR-V (which is generally low maintenance among ICE cars) did about 30K miles and needed a clutch, a set of brake pads, a power steering pump, a belt tensioner and serpentine belt, an alternator, 6 oil changes, plus wiper blades and washer fluid. Some of those were wear items (and last more than 5 years [clutch/alternator]), but the difference between an even traditionally considered low-maintenance/high-reliability ICE vehicle and a low-end electric was much greater than I expected. My parents' experience (with two electrics and a single diesel) is similar. The electric cars need much less intensive and much more predictable maintenance.

throwaway0a5e 6y ago
>Dealerships probably do quite a bit of oil and filter changes as part of annual service. Those are typically break even or loss leader. >my wife's CR-V (which is generally low maintenance among ICE cars) did about 30K miles and needed a clutch, a set of brake pads, a power steering pump, a belt tensioner and serpentine belt, an alternator, 6 oil changes, plus wiper blades and washer fluid. And were you not doing your own maintenance would you be having a dealer do that stuff? Exactly.
- sokoloff 6y ago
  No, I would be having a much less expensive independent mechanic doing that stuff. But I care about how much I spend on my cars. Most of my friends seem to think "my car has a badge X on it; I always take it to the X dealership; as long as they charge me less than $1000 per visit, I don't think about it" which is crazy to me. They think $700 for a single-axle brake job is a reasonable price to pay. That's how dealerships eat because there's a lot more people who act that way than act my way.
  - throwaway0a5e 6y ago
    I don't think your friends are representative of the average car owner but maybe they are. Time will tell.

snarf21 6y ago

I'm sorry but you don't understand how dealerships work. You seem to think the only amount of money they make is the difference between their price from the factory and the final price you pay on the invoice. I agree this number is small but that is not where the profit comes from. They make far more from the financing which today sees people getting 7 year loans to pay for a $65K SUV. They also make a ton from selling extended warranties and other add-ons, and they push this stuff aggressively (sadly). Additionally, they make quite a bit from reselling used cars. There is a lot of obfuscation in how much you get in rebates and knock-downs versus your car's "trade-in" value. The "real" acquisition cost of a used car is far lower than you might think. (One trip to a dealer's car auction will set you straight.) The markup on a used car can be far more than a new. They could sometimes make 25% or more plus they are still going to sell a lot of people extended warranties since the factory one is almost expired. Additionally, parts and service make quite a lot since, as you point out, upper middle class people "trust" the dealership and pay 3x the cost for most vehicle services. (Source: my dad has been selling cars for over 40 years)

throwaway0a5e 6y ago
Are you disagreeing or nitpicking? Pretty much none (well I guess the salesman will have a harder time throwing in free oil changes to seal a deal) of the "time of sale" stuff is effected by the switch to EVs though which is why I didn't bother to cover it in depth or make a new vs used distinction. Only a subset of service is affected. Yes, dealerships make a lot of money on service but they also waste a lot of bay-hours on warranty so it balances to a degree. Dealerships aren't so lean that that a reduction in service will sink their entire business model.