I mentioned in a different thread that my daughter has had her car in the shop for quite a long time.
It’s a 2007 Prius that she bought “AS IS” from a Honda dealership in January, 2016. The dashboard instrument cluster failed catastrophically on June 8 (while she had the car in “Park”). I had her take it to the nearest Toyota dealer service department for diagnosis (and repair, if it wasn’t going to break the bank), where she was told that a new instrument cluster would have to be ordered, it would cost $730, and they didn’t know when the part would arrive.
She was also told that the dealership was picking up the tab for a rental for her to drive while her car was out of commission. So she’s been driving a 2016 Hyundai Sonata from Enterprise for the past four weeks and change. On Toyota’s nickel.
I’m not looking a gift horse in the mouth, here. But Toyota’s got to be losing money on this deal. I don’t know if Enterprise considers the Sonata to be a compact or an intermediate, but either size exceeds the cost of this repair. Even if Toyota has a 50% discount with Enterprise, it’s over $375 to rent this car for a month. That leaves less than $360 to cover parts and labor.
In my researches, I’ve found that Toyota has offered an Extended warranty on this part, but the warranty only lasts nine years, so that doesn’t appear to apply. Any ideas?
Total WAG on my part, but I’ll bet Toyota is heavily subsidizing this for the dealership, in the interests of goodwill and good reputation for what is pretty much their flagship line. As cars get more complex and electronic parts like this get more expensive, people worry about these kinds of repairs. Toyota (and other car makers) are probably concerned to keep the negative anecdotes floating around to a minimum.
And even if they’re losing money on this particular deal, they might still profit on more typical cases, and don’t want the bad reputation that would come from not being consistent about it.
There is a well-established Toyota dealer here that has done similar things. The owner came across a kid in a broken down Toyota once and called to have the car towed to his dealership, where he repaired the car for free and didn’t even charge for the towing.
He now has a customer for life, not to mention word-of-mouth advertising. Is that worth a thousand bucks? Hell yes.
Repeat business. Most dealerships make more from the garage than they do the sales floor and 90% of what people have done (like basic service) pays off real well. Go one step beyond for a customer with a real issue and word gets around ---- and a lot of cheap fast money flows your way.
She’s pretty happy with the rental and not in a hurry. Called them at the three week point to check status. She was told an identical part to hers had arrived that morning after a four week wait, so that might be the standard. It didn’t arrive yesterday at the four-week point.
My parents had a somewhat similar situation with their Acura. They had an extremely odd electrical failure that necessitated a major rebuild of the car. It had never happened before or only happened once before and the company was so interested in the fault that they paid for my parents to drive another Acura while they flew out an investigation team from Japan. They did the complete rebuild and extended their warranty on the car.
This situation sounds different in that it’s a more common problem. The only thing I can think of is that Toyota (the company, not the dealer) is subsidizing the costs as part of a larger recall.
Offering free rental helps sell the car. The cost is covered by the extra sales they get from people who see it as a reason to buy a car from them (and who end up never using it). Add that to making the customer happy so they buy from you again and it makes you money in the long run.
If you (or she) decide to buy from this dealer in the future based on the dealer’s generous reaction here, I suspect even a dealer’s $700 investment will be recouped.
Third parties can clone and replace the instrument cluster in that car for about 1/4 of that price. The dealer charges a huge markup on this job because you can’t just buy another cluster and pop it in yourself - it has to be programmed to match the original one the car came with. Same as replacement keys - a key costs about $1.00 but because the dealer has the almost exclusive ability to program the chip in the key to be able to start your car, they charge like $250 - for a friggin key!
But third parties are able to do both of those jobs for pennies on the dollar so the dealer has to add some kind of value to getting it done with them to differentiate themselves from the third parties. Goodwill and future sales etc. all figure in to it, I’m sure, but they make such a huge margin on this particular repair it is worth it to them to rent a car if it takes a long time to get the part, even for this one repair in a vacuum.
If you had a restaurant that sold an average burger for $50.00 you would happily give a customer free drink refills while they waited for it to arrive.
What was the original sale date of the car? If that particular one was a leftover, I’d believe the clock starts ticking from sale date & not manufacture date.
There are probably relatively few instances where the rental/loaner is going to be needed for a month. And my guess is that the dealership more than makes up for those with the increased sales/service revenue that they get by offering the rental/loaner. I bought a new van in 1999 at a Dodge dealer. The dealership had horrible service. No weekend hours. You had to make an appointment days in advance (I suppose there might have been an exception if you were towed in, but that didn’t happen to me). Cars had to be dropped off at 7:30 am ( and since everyone was told the same time, there was a 3 block long line and I might not be able to leave until 8:30), and they had to be picked up by 5:30. Once you brought the car in, you were on your own. No loaner or even a shuttle. I only had warranty work done at that dealership. Everything else, like oil changes, etc I had done at an independent mechanic. Who also didn’t have loaners or a shuttle, but did let me drop off the car the night before and pick it up until the gas station closed at 11 pm, so I didn’t have to get to work late or leave early.
I bought my next car at a different Dodge dealership. Service hours were M-F , 7:30 am-12:30 am and Sat 8-6. They were open on Sunday for oil changes and such, but not repairs. I almost always got a loaner/rental and always when the repair would take until the next day. If they didn’t have a loaner/rental available, there was a shuttle that would take me to/from the train or even a restaurant or mall if the car would be ready the same day. I took the car to that dealer for everything, including oil changes. And I will buy my next car there. There are probably a hundred or more people like me for every time the Toyota dealer ends up paying for a rental for a month.
Not really sure when it was first sold (remember, she got it from a Honda dealership, and there’s no CarFAX), but based on when the registration comes due, probably March or April 2007. Anyway, if it did qualify for the waarranty extension, I’d expect to not be paying for the part.