And this is a routine occurrence for me whenever I take my car in for servicing. What starts out as a couple hundred bucks worth of work morphs into half a K of an under-the-hood, incomprehensible operation. Maybe I have sucker written all over my face, but I'm probably not the only one. Car dealerships have some of us over a barrel when it comes to servicing, so it's no surprise that this is the area in which they make all their money.
But does this translate into a competitive advantage? I don't think it does, because to get customers to this over-the-barrel point, they first have to sell you the car. And knowing how valuable the service customer is, they are willing to sell cars at a loss in a highly competitive bid to land the service
So is there something a customer can do to protect himself? I suspect only owning/leasing cars that are under warranty could help: this way you only transact with the dealership in areas where they have the least (or sometimes even negative) gross margin. But the flip side of this is that you're owning the car during its highest years of depreciation, so in a way you're paying for that warranty unless you really value newness.
It's time I got a new car. Any advice from the car guys out there who are also value guys on how to get the most for the least?