WHAT DOES AN OIL CHANGE TRULY COSTS AN AUTO REPAIR SHOP.

Thank goodness we are having an incredible season!

I just drop by to share with you this little bit of info:

THINK TWICE BEFORE PULLING THAT CAR INTO YOUR BAY FOR A CHEAP OIL CHANGE!

Do you have a copy of that spreadsheet to share? I'd like a copy please.

EDIT: Nevermind, I just found the article where this was posted. I was under the assumption that it was your spreadsheet.

How much does it cost to say "No" to all the customers that want an oil change at market price? It'll never be a money maker but a good service to my customers. Same as inspections, free air, go for a ride real quick what's that noise type stuff. I'll never try to attract customers with $14.99 coupons but even at $32.99 or whatever it isn't a profit center on it's own.

How much does it cost to say "No" to all the customers that want an oil change at market price? It'll never be a money maker but a good service to my customers. Same as inspections, free air, go for a ride real quick what's that noise type stuff. I'll never try to attract customers with $14.99 coupons but even at $32.99 or whatever it isn't a profit center on it's own.

My point in opening the thread was to open up the discussion of giving away services.

It should be repugnant to you to keep doing oil changes at below your cost for the sake of bringing in customers that do not pay their way and basically get from you a subsidy.

It should be ingrained into your brain that it costs you hard dollars every car that you pull into your bays. If you don't know what your costs are, you are subsidizing your customers with your old age suffering, you will not always will be young and strong and not putting money away for retirement will be a painful sin to bear once you are old.

If the competition around you is too stupid to figure it out, tie up their bays with oil changes, send them all the cheap oil change work to them, pull the gravy work off the vehicle and send it up the road to get the oil change done, see how fast they learn.

btw, some will not learn and go out of business.

I totally agree with your point Harry, none of us should compete in the race to the bottom as Joe describes it. "If the competition around you is too stupid to figure it out, tie up their bays with oil changes, send them all the cheap oil change work to them, pull the gravy work off the vehicle and send it up the road to get the oil change done, see how fast they learn." see how fast you need to attract new customers is more like it. Most people don't like going to two mechanics, that guy that did your unwanted work will get the next batch of gravy.

We give away free flat repairs and tire rotations with a tire purchase. I offer free fluid top offs between oil changes. I do a lot of checks for free (not diagnosis) It eats time doing free work, but overall we gain much more than we lose.

"You can have everything in life you want, if you will just help other people get what they want." - Zig Ziglar

I totally agree with your point Harry, none of us should compete in the race to the bottom as Joe describes it. "If the competition around you is too stupid to figure it out, tie up their bays with oil changes, send them all the cheap oil change work to them, pull the gravy work off the vehicle and send it up the road to get the oil change done, see how fast they learn." see how fast you need to attract new customers is more like it. Most people don't like going to two mechanics, that guy that did your unwanted work will get the next batch of gravy.

 

We give away free flat repairs and tire rotations with a tire purchase. I offer free fluid top offs between oil changes. I do a lot of checks for free (not diagnosis) It eats time doing free work, but overall we gain much more than we lose.

 

"You can have everything in life you want, if you will just help other people get what they want." - Zig Ziglar

Alfred,

I speak from experience, I don't do cheap oil changes. My conventional oil change price is $49.95 and that is only if we already have the car on the lift for other work. If you are coming off the street the price is $59.95, synthetics are $99.95+

Try this simple exercise, go into your database, print out how many oil changes you did for the past five years, then deduct your costs from it, how much money did you made or lose?

I haven't lost any money on LOFs in the past 7 years.

Here is the kicker, the amount of revenue you are losing is tremendous once you see it and internalize it. What is worse, the time taken on oil changes that lose you money could have been used to make money and give better customer service to a much better class of customers.

Somebody sold that "oil change customer" a car,clothes,watch,sell phone,place to stay,etc. I figure it costs $100.00 each to get a new customer to brag about my shop. Give every oil change customer a reason to sell your shop to others. I would change oil with filter, hand car and clean windows, place $2.00 bill with discount card behind his fuel door and ask for their referrals. I keep track of all referrals. After years of doing this i a few customers just swing by for a free hand wash, fluid level and tire air checks. My co-worker scolded me for wasting my time. I then pulled up the "time wasting" customers account showing that in the last few years they spent $6k but referred $40k worth of work to our shop.

Somebody sold that "oil change customer" a car,clothes,watch,sell phone,place to stay,etc. I figure it costs $100.00 each to get a new customer to brag about my shop. Give every oil change customer a reason to sell your shop to others. I would change oil with filter, hand car and clean windows, place $2.00 bill with discount card behind his fuel door and ask for their referrals. I keep track of all referrals. After years of doing this i a few customers just swing by for a free hand wash, fluid level and tire air checks. My co-worker scolded me for wasting my time. I then pulled up the "time wasting" customers account showing that in the last few years they spent $6k but referred $40k worth of work to our shop.

No buying it. We all have that unicorn account, too. simple math. 1+1=2. How many oil changes did you do last year? How much did they cost you? How much revenue did you receive? Simple as that.

No buying it. We all have that unicorn account, too. simple math. 1+1=2. How many oil changes did you do last year? How much did they cost you? How much revenue did you receive? Simple as that.

I duplicated that "Unicorn account" so many times that i was known as the "Richest Car washer in town" My very first customer in 1969 brought me a car that needed $75.00 to fix. When i quoted that repair he said i was too high and wanted to pick the car up. I told him give me 30 minutes. I washed his car and cleaned the windows so good it looked like a new car. The customer came up the driveway and asked where his car was because he could not believe that the cleaned up car was his. He asked me why i cleaned up his car when he did not buy anything. I told him that Jesus washed feet and i wash cars. I told him that i don't need his money but i need his referrals! He never spent a penny with me but over the next few months referred $4k worth of work to me. Our business is all about referrals. I spend my "Advertising money" on my customers and ask everyone for referrals. I even cut customer yards for referrals. The last time i did that before i retired it netted me a $25k mechanical restoration.

I duplicated that "Unicorn account" so many times that i was known as the "Richest Car washer in town" My very first customer in 1969 brought me a car that needed $75.00 to fix. When i quoted that repair he said i was too high and wanted to pick the car up. I told him give me 30 minutes. I washed his car and cleaned the windows so good it looked like a new car. The customer came up the driveway and asked where his car was because he could not believe that the cleaned up car was his. He asked me why i cleaned up his car when he did not buy anything. I told him that Jesus washed feet and i wash cars. I told him that i don't need his money but i need his referrals! He never spent a penny with me but over the next few months referred $4k worth of work to me. Our business is all about referrals. I spend my "Advertising money" on my customers and ask everyone for referrals. I even cut customer yards for referrals. The last time i did that before i retired it netted me a $25k mechanical restoration.

I am still in the trenches, and I am not giving away my work. Yes, i do complementary work and services to those customer that value my work. I do depend on referrals too, but I am not losing money on my bread and butter work.

Again, for those of you still in the trenches, do the math, print out the report listing all the oil changes you have done up to date in the last five years and do the math. Then tell me you think you can survive the next five years doing the same.

 

I am still in the trenches, and I am not giving away my work. Yes, i do complementary work and services to those customer that value my work. I do depend on referrals too, but I am not losing money on my bread and butter work.

 

Again, for those of you still in the trenches, do the math, print out the report listing all the oil changes you have done up to date in the last five years and do the math. Then tell me you think you can survive the next five years doing the same.

The fact that i was located in and near one of the richest zip code in Texas helped alot.