Would You Purchase an Electric Car?

With the increasing concern over climate change and the cost of gas/importing oil from overseas, there is now a move towards cars being powered by something other than gasoline.

Early “conventional hybrid vehicles” that were introduced in the 1990’s merged a traditional internal combustion engine with a relatively small battery.  The battery provided supplementary power to the engine and was charged usually using regenerative braking, involving charging the battery as the car was decelerating.  These early hybrid vehicles were known for being only slightly more fuel efficient than small economy vehicles of the time in terms of fuel efficiency, and concerns about battery life and increased maintenance costs resulted in slow early adoption.  As with many new technologies, the initial impression turned some people off the concept of electric vehicles for years.

Now recent improvements have resulted in new battery technology and a further shift towards the electric components providing actual power to the vehicle rather than simply supplementing the gas engine.  Tesla Motors only manufactures fully electric plug-in vehicles which you can charge at your home overnight.  They offer a daily range of about 450km, more than enough for most daily commutes and usage.  In addition, they are rolling out supercharging stations across Canada and the US with the goal of offering drivers fast recharging to make cross-country trips nearly as easily as you would in a gas powered car.

Many countries and provinces are also trying to encourage this early adoption of electric cars.  Ontario, for example, has dedicated a section of the Ministry of Transportation website to providing information on electric vehicles including the locations of charging stations, answers to frequently asked questions about electric vehicles and information about tax credits being offered to encourage the purchase of plug-in vehicles. 

In Ontario, there is a tax credit available of between $5,000 and $8,500 depending on the size of the battery in your electric car.  This credit can be applied either to the purchase of a new vehicle or to most leases.  Dealerships can also apply for the credit on behalf of the owner, further simplifying the process for buyers and allowing the dealership to offer a lower sticker price on the car.

- Jeff

Service department let down!

I am going to talk about poor service I have both witnessed personally and heard about from family and friends to make recommendations that can help dealers be more competitive and successful. Many dealerships offer excellent service, so the recommendations below will not apply to everyone.

I have been a car owner for over 33 years and I have had a lot of experience dealing with auto dealership service departments. Years ago there were lots of options for car repairs, but the small auto repair shops located at local gas stations have been disappearing for the past decade and now dealerships are the most common choice for repair work. This is a fortunate circumstance for dealerships because the service department usually provides significant margins, but given the level of service I’ve seen lately, I wonder if some dealers aren’t taking this shift for granted.

Over the past 15 years or so I have switched from purchasing cars to leasing them, and consequently I moved my repairs from a local garage to the automobile dealership. I’m not your average Joe at a dealership waiting for repairs. I’ve been working with dealers for many years and I know what drives their bottom line, and I can tell you that service departments deserve more attention at some dealerships.

Recommendation 1 – Get customers in and out as efficiently as possible.

Service is a volume business meaning that a dealership needs to service a lot of customers to see good returns. Dealerships need to be prepared for high volume, and usually they are. I never just show up at a dealership for repair work. I call the day before, secure a time that works and make sure that I am not late for the appointment. And still, sometimes I have to wait a long time before anyone greets me and starts the service appointment. In a volume business, every customer counts. And, in the auto service business, which is a necessary evil to most people, making a customer wait is painful. They don’t want to be there and even though there is coffee and newspapers, they generally have something better to do. Your service department will take care of servicing cars, but you also need to make sure someone is servicing the customer. If your customer is going to wait for their car to be serviced, be sure to keep them informed if your promised delivery time changes. Have a dedicated employee greet and acknowledge incoming customers. Take their keys and let them go as soon as possible.

Recommendation 2 – Don’t make promises you can’t keep.

On countless occasions I have been promised that my car would be ready in an hour only to be let down when it wasn’t ready for 90 minutes. I understand that things can get hectic in the service bays, and there are unexpected situations and a million reasons for a service delay, but your customer doesn’t care. So, in all circumstances, recommend that they take advantage of your shuttle service or take a loaner and leave their car with you. It will take some stress off the service department because they will have more time with the car and it will avoid a situation where you are likely to upset the customer.

Recommendation 3 – Go the extra mile.

I can’t tell you how many times I have heard of people having to wait for their car because they were out of bounds for the service shuttle. This isn’t a pizza delivery service – these customers are paying you hundreds of dollars for a painful, mandatory service that offers them little personal value. Go the extra mile, literally, and do your customers a favour. They’re paying you for it and they’ll continue to pay you for it in loyalty and recommendations to their friends and family.

Recommendation 4 – Hire the right people and train and reward them.

Service staff can have attitude because they are rude or overworked and dealing with the customer takes them away from the long line of cars demanding their attention. You certainly don’t receive this type of service when you enter the sales area of the auto dealership. I know that the service department is a key profit center for the auto dealership, so why is there such disparity in the service provided in the service department? Your service department needs to service the customer as well as the car. Attention to customer service should be considered during the hiring process; is this person technically proficient and well-mannered? Would I want to introduce this person to my most valued customers? Once you’ve hired the right people, have you told them what you expect and trained them on how to deal with a long line? A frustrated customer? Have you rewarded them when you witnessed good behavior? You need to tell your employees what you want and reinforce it with monitoring and rewards.

Recommendation 5 – Walk the floor.

I believe the problem with service really rests at the top. Auto dealer owners are not spending enough time training, educating, rewarding and monitoring their service employees. When is the last time you walked the floor? Did you notice the bored customers flipping through the newspaper in the service department? Did you ask them about their experience? Did you watch your service department interact with your customers? Your attention to service will communicate volumes to your staff.

So, while dealerships are in the glory days of service with less competition from mom and pop shops, don’t be lulled into complacency. Chains of aftermarket service shops offer “Warranty Approved” services that threaten the dealership’s hold over the leased car maintenance market. In addition to threats from aftermarket shops, you can lose customers to the next dealership over when they start to shuttle to and from your area, promptly greet customers as they walk in and generally make service as painless as possible. The profits your dealership gains from service are far too precious to take a back seat.

-- Jeff Carbell

The first scratch is the hardest

In late 2004 I purchased my first new car, a 2004 Honda Civic SI sedan. My girlfriend was living in Montreal and I was in Toronto. She came to Toronto shortly after I picked up the car and I drove up to her parents’ house to show her my prized possession. On the way I decided to stop at an automatic car wash to make sure the car looked its best. I paid my money and drove into the bay. I will spare you the gory details as I am still sensitive about the incident, but let’s just say I paid for a touchless car wash and in the end I did not receive what I paid for. Even though the owner took responsibility, I still had to choose how I would get the damage fixed. Should I go to an independent body shop or take it back to the dealer?

I am lucky to have family in the business so I can get honest advice whenever I need it, but what is an average consumer to do? When I went through driving school they did not teach us what to do if an accident occurs. What documentation do I need? Where should I get the car towed to? How do I order a tow truck? Should I call the police? These are serious questions that many of us do not have the answers to.

The Toronto Automotive Dealers Association has addressed this problem with Renewit. Renewit can be offered to customers as a service they can use in case of a collision and it includes a mobile app that provides collision reporting templates, safety tips and traffic information. Bob Redinger, Co-Committee Chair Person at Renewit Inc., explains that if a customer is in an accident, they can contact Renewit and Renewit will assist the customer in bringing the car to the dealership of their choice for repair. Renewit can organize a tow truck to pick up the car, contact the dealer to let them know the car is coming in for repair and it can also help put the customer in touch with the right sources to get answers about insurance claims and repair coverage. In addition, the application allows dealers to contact their customers to inform them of specials, etc. This program is completely free to customers.

For dealers, the program is seen as a customer retention tool that provides customers with peace of mind that if they are ever in an accident they will have support from a knowledgeable and trustworthy source. Dealerships pay a monthly fee to be listed as a Renewit-approved dealer and the service can be offered to customers when they are purchasing a new or used vehicle or servicing a car through the dealership. In order for the dealership to get the full benefits of this program, employees should assist customers in installing the mobile application and setting up their personal profile.

It is a challenge to gain a competitive advantage in any industry, and this program allows dealerships to offer ongoing service to customers as well as providing an opportunity to get referrals through being listed as a preferred Renewit dealership.

Go to www.renewitnow.com for more information.

-- Bryan Redinger