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Go Back   Bimmerfest - BMW Forums > BMW Model Discussions > 5 Series > E39 (1997 - 2003)

E39 (1997 - 2003)
The BMW 5-Series (E39 chassis) was introduced in the United States as a 1997 model year car and lasted until the 2004 when the E60 chassis was released. The United States saw several variations including the 525i, 528i, 530i and 540i. -- View the E39 Wiki

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  #1  
Old 09-27-2012, 09:57 AM
dvsgene dvsgene is offline
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Do most dealers get a bad rap as $tealers when most are trying to cover overhead?

I see it over and over again, people referring to their dealers as $tealers. While I do realize they charge more than than your indy or an online vendor for parts, people forget they have huge overheads.

1) Huge lot with inventory of cars and parts to choose from located on a major roadway.
2) Payrolls to pay for service, parts, finance and sales teams.
3) Interest charges on every single car sitting on the lot unsold.
4) "Free" coffee and donuts.
5) "Free" loaner cars
6) Latest software and equipment to diagnose the most recent models.
7) 2 year warranty on parts installed by them.
8) etc, etc.

while indies are usually a small one person service place located off the beaten path with 4 walls to fix your car.

Anyone know of indies who provide loaner cars or state of the art equipment with a full line of parts stocked in-house and 2 yr warranties?

In the end, how many people forget the differences and just being ignorant about the conveniences. On the flip side, one can argue indies who don't offer any of those conveniences are ripping you off as well.

Of cos, I realize it matters less with our 12 year old cars. Comments?

Last edited by dvsgene; 09-27-2012 at 11:06 PM.
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  #2  
Old 09-27-2012, 10:09 AM
cn90 cn90 is offline
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My indy charges $70/h, dealer $100/h.

It is not the money part, but the dishonesty of dealer's service dept that bothers cars' owners.
On the other hand, you can easily find dishonest mechanics too.

Approx. 90% of the people in the population just fill gas and go and have no ideas how their cars work (or don't work).
The car repair industry takes advantage of the fact that people are ignorant when it comes to car repair.

So....Knowledge = Power.
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  #3  
Old 09-27-2012, 10:17 AM
dvsgene dvsgene is offline
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Originally Posted by cn90 View Post
My indy charges $70/h, dealer $100/h.

It is not the money part, but the dishonesty of dealer's service dept that bothers cars' owners.
On the other hand, you can easily find dishonest mechanics too.

The car repair industry takes advantage of the fact that people are ignorant when it comes
Dishonesty can and exists in just about every industry. However, most people say they overcharge which comes down to a money issue. Overcharging exists in many service establishments.

As a simple counterpoint, if one takes into account the cost of a "free loaner" car for a day or two which is usually another BMW, the cost of car rental for a compact car alone makes the dealer a bargain. All else being equal.
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  #4  
Old 09-27-2012, 10:44 AM
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DHoang DHoang is offline
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Dealer customer demographics tends to be more geared towards new car and CPO car owners.
As such, they typically stock parts for cars that is still in production so that they can service vehicles that are under warranty. Rarely, if ever, do they sit on stock parts for cars that are out of warranty, such as our e39. that just does not make good business/economic sense b/c shelf space is a premium, and if the parts don't move, then the shelf space is burning up real estate costs, not to mention cost for procuring those parts in the 1st place.

Free loaner cars are not provided across the board, btw...they are given to owners who bring their car in for warranty work, for collision work, and for work the dealer knows has healthy profits into them. If you bring your bmw in for an oil change, don't expect to have a loaner for the day. rather, you will either sit in the lobby and wait, or take a courtesy van to whereever you need to go.

I know of very, very few owners who go to dealers once their car is out of warranty coverage.
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  #5  
Old 09-27-2012, 10:51 AM
dvsgene dvsgene is offline
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Quote:
Originally Posted by DHoang View Post
Dealer customer demographics tends to be more geared towards new car and CPO car owners.


I know of very, very few owners who go to dealers once their car is out of warranty coverage.
Yes, these two statements do summarize it from my standpoint. As a newer car owner, the price paid at the dealer is not so bad as one for previous model years.

For older model car owners, I agree, it can be considered a rip off depending on the "conveniences" you get, access to bootlegged GT-1 software, and DIY capabilities but that doesn't necessarily mean they are $tealing from you. As CN90 said. Knowledge=Power.
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  #6  
Old 09-27-2012, 11:00 AM
acoste acoste is offline
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When I just walk into the dealership's parts department and buy some parts I don't care about the 100 cars in the showroom, I don't drink coffee. I just want the stuff I need. And they don't have every parts in stock so I have no extra benefit compared to an online store. This case there is no reason to pay the extra money.

I also feel ripped of when I have to pay for a repair which is caused by a weak design. They gain extra money by doing mistakes. I don't feel this correct. Very similar to the medical industry where the doctor is interested you to be sick, they get no money if you are healthy.
(I have heard some rumor, that in India the doctors get money when they are able to keep people healthy. Not sure if that's true)

I was also angry when I entered a dealership in Las Vegas and I saw that all the new cars (30-40) are idling outside with the air condition on. I know it's hot during the day but that is a HUGE environmental pollution plus wasting money. The smell was horrible.

Other than these you are correct.
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  #7  
Old 09-27-2012, 11:39 AM
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Jason5driver Jason5driver is offline
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IMO, I think the dealer does rip people off, but it also depends on which dealer it is, and where that dealer is located.
If your dealer is located near other BMW dealerships, that offer competition in pricing, then usually the prices are not hiked-up...
However, if the dealer near is remote, that dealer now has a monopoly in that area, and feels free to hike prices up to whatever, because the average 'Joe-schmoe' is stuck paying it...

I try to form good relations with my local dealer, however, as I said above, they are remote, and the next closest dealer is 3 hours north in Kansas City.
So, I usually get small OEM items that I know are dealer-only items from my local dealer, because the price usually negates itself if you compare to buying from an online vendor and include shipping...

I even offered to my local dealer that I would frequently purchase from them if they were somewhat negotiable, and match the prices of other dealers...
However, my local dealer had no reply; the rep. behind the counter only said that he would "pass the word" - but still after almost a year, still no effort on their part...

Some dealer services are reasonable and make sense, like mounting and balancing tires...
However, when the dealer wants $4 for a bolt... I will ask if it is made of gold...

Thanks!
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  #8  
Old 09-27-2012, 11:52 AM
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Fudman Fudman is offline
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I refer to my dealership as a stealer based on my long term experience with them. Does this term apply to all BMW dealers? Probably not. But it certainly applies to mine.

My dealership gives you all the conveniences but those are not "free". But what irks me (and appears to be shared by many on this forum) is that they appear to think their clientale is wealthy, knows nothing about their cars, will do whatever it takes to care for their cars and are ripe for the picking. I am not poor nor rich and I do know a few things about cars. And I hate getting that feeling I was ripped off.

30 years ago, I got generally bad service from them when I had them work on my e21. But that was awhile ago. Fast forward to a few years back, when I had the Trans Prog Failsafe lamp go off on my previous e39, they kept the car for two days and could not identify the cause of the error message. Their recommendation was to replace the tranny for $3.5K. My car had 50K on it and I got ZERO consideration for being out of warranty by 3 months and 2K. So I told them to reset the OBC (for $127) and give me the car back. The TPF warning never came back! Clearly the service manager pushed for the easy (for him) and the most profitable way to resolve my problem. You would think a BMW service shop would know a little about their cars. I now know more about causes of the TPF warning just from reading this forum than they ever did. This one event sent me down my current path of DIY.

I totally get that they are a business and need to make money. This is America. Nearly everything is "all about the money" (e.g. NFL refs). For me, my "stealer" earned his reputation (and I am not alone judging by Angies List). Hence, they will always be the stealer to me.

Last edited by Fudman; 09-27-2012 at 11:53 AM.
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  #9  
Old 09-27-2012, 12:01 PM
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seemyad seemyad is offline
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Quote:
Originally Posted by dvsgene View Post
I see it over and over again, people referring to their dealers as $tealers. While I do realize they charge more than than your indy or an online vendor for parts, people forget they have huge overheads.

1) Huge lot with inventory of cars and parts to choose from located on a major roadway.
2) Payrolls to pay for service, parts, finance and sales teams.
3) Interest charges on every single car sitting on the lot unsold.
4) "Free" coffee and donuts.
5) "Free" loaner cars
6) Latest software and equipment to diagnose the most recent models.
7) 2 year warranty on parts installed by them.
8) etc, etc.

while indies are usually a small one person service place located off the beaten path with 4 walls to fix your car.

Anyone know of indies who provide loaner cars or state of the art equipment with a full line of parts stocked in-house and 2 yr warranties?

In the end, how many people forget the differences and just being ignorant about the conveniences. On the flip side, one can argue indies who don't offer any of those conveniences are ripping you off as well.

Of cos, I realize it matters less with our 12 year old cars. Comments?
1st, I 100% agree with FUDMAN. His story speaks volumes. They see dollar signs in BMW owners like sharks smell blood in water.

I 100% disagree with op's conclusion based on one simple fact:

All of the above overhead cost may be correct. HOWEVER, maintenance costs should NOT be elevated to support the overhead of other departments (if that is indeed the case). They get BMW Dealer wholesale prices then charge 40% more than Indys for the same work.

I could see 10% more for the certified BMW mechanic not 40% more. That being said most indies have certfied BMW mechanics as well.


Great Post BTW!



EDIT:

Last week I priced RUBBER BUSHINGS for brake caliper guide bolts.

Every Place But stealer: $12 - $16 per caliper

Stealer: $53 PER CALIPER

.

Last edited by seemyad; 09-27-2012 at 04:31 PM.
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  #10  
Old 09-27-2012, 12:03 PM
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BentValve BentValve is offline
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Almost every dealer I have been to for service will try to tell you that this is broken or that is broken and will need replacement when neither parts needed to be replaced. I also have friends who used to be techs at stealerships and they themselves say they would never take their own car to a dealership for service unless it was last resort. Also, oil change for $150 and the oil & filter cost $50 at the most? lawlz.

Last edited by BentValve; 09-27-2012 at 12:07 PM.
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  #11  
Old 09-27-2012, 12:16 PM
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bluebee bluebee is offline
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  1. They charge too much for parts.
  2. They charge too much for service.
  3. They won't even give me an estimate for repairs over the phone.
  4. And, they're no better than anyone else for either parts or service
    • (certain exceptions like Behr expansion tanks and sensors noted below)
- What BMW E39 parts & supplies are most often recommended to buy OEM from a dealer or sponsor (1)
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  #12  
Old 09-27-2012, 12:37 PM
visalusbeamer visalusbeamer is offline
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I call them that for a good reason. One example of my last experience with them is when they tried charging me $300 to refill my DEF tanks. I thought something wasn't right about that. I got all sorts of explanations from the rep as to why it costs so much and blah blah. I smiled walked away, did 15 min of research on this forum and refilled my DEF tanks at home in 30 minutes, total cost? A whopping $25.

You do the math. 30 min of work and $25 worth of DEF and funnel = $300+?

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  #13  
Old 09-27-2012, 12:44 PM
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doru doru is offline
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I am not sure what the mark-up for parts is in the US, but here in canada it's ridiculous.
Example: radiator OEM = 528$. If you know the guys they give you a 10% discount. That's 480$.
How much is the exact same radiator elswhere, with shipping & duty? Less than 1/2 of the above reduced price. No coffee included. I just wear out the showroom cars by looking at them.
To read a code, labor is 150/hr and the cost is 1 hr or if you're lucky, it's 1/2 hour. It takes me les tha 5 minutes.
A set of brakes front/rear, complete service is 1200$. No loaner. For that price I do my own work TWICE with premium parts and I still have money left for about 4 complete oil changes.
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  #14  
Old 09-27-2012, 12:59 PM
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bkgreene39 bkgreene39 is offline
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Some of the prices are ridiculous I agree. I have never had my vehicle serviced at a dealership and not planning on it. I went to purchase an expansion tank and some rivets thats about it. They wanted $505 for the behr radiator. $9 for one plastic bleeder screw.

Reading some of these posts makes you wonder that dealerships either want to rape you for repairs and or are incompetent.
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Old 09-27-2012, 01:04 PM
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tmvE39/E53/Z32 tmvE39/E53/Z32 is offline
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Their prices are ridiculous on parts and labors + Freedom of Speech.
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  #16  
Old 09-27-2012, 01:20 PM
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Chaser Chaser is offline
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Quote:
Originally Posted by DaveN323i View Post
Gee, go and watch Law & Order, and miss the hijack.

Don't worry Alex. English is also not my first language.

But guess what? I am also an editor for a publishing company.

ONLY in America

[Edit] Wait! I am into grammatical correctness? What gave you that idea?
You sound like a CPA with a narrow field of vision.
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  #17  
Old 09-27-2012, 01:28 PM
jarhed1964 jarhed1964 is online now
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Quote:
Originally Posted by dvsgene View Post
I see it over and over again, people referring to their dealers as $tealers. While I do realize they charge more than than your indy or an online vendor for parts, people forget they have huge overheads.

1) Huge lot with inventory of cars and parts to choose from located on a major roadway.
2) Payrolls to pay for service, parts, finance and sales teams.
3) Interest charges on every single car sitting on the lot unsold.
4) "Free" coffee and donuts.
5) "Free" loaner cars
6) Latest software and equipment to diagnose the most recent models.
7) 2 year warranty on parts installed by them.
8) etc, etc.

while indies are usually a small one person service place located off the beaten path with 4 walls to fix your car.

Anyone know of indies who provide loaner cars or state of the art equipment with a full line of parts stocked in-house and 2 yr warranties?

In the end, how many people forget the differences and just being ignorant about the conveniences. On the flip side, one can argue indies who don't offer any of those conveniences are ripping you off as well.

Of cos, I realize it matters less with our 12 year old cars. Comments?

The last time either of my Bimmers was on the dealer rack, they chose to throw parts at the problem, costing me a LOT of money, rather than diagnose the issue. At about $1500, I took the car out of there, took it home, and diagnosed/fixed the problem within three hours.

I learned right then and there that the excuse "I don't have time to do it myself" would cost me money every time I spit it out.
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  #18  
Old 09-27-2012, 01:32 PM
dvsgene dvsgene is offline
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At the risk of being flamed for the rest of the thread by providing counterpoints, I wish to preface the following with views strictly from a business standpoint and not a DIY standpoint. Having never owned a BMW franchise, I simply state counterpoints from standard industry practices:

1) If BMW offers a dealer the right to an exclusive sales radius in exchange for for money and the dealer charges more because they need to make up that choice and cost of exclusivity; is that good biz acumen or price gouging?

2) If a BMW dealer trains a mechanic for 5 years by sending them to BMW continuing ed classes every year and on average a mechanic leaves once a year to start their own business using what knowledge was gained at the dealership, is it not justified to charge a bit more for that added cost?

3) Indies are known to buy parts at wholesale pricing from the dealer and mark up 50% on parts to us. While some of us bring parts to save on markups, do many of us consider that added 50% as warranty coverage or simply price gouging? Remember many indies won't warranty parts not bought by them.

4) When indies charge specials for oil changes at almost cost, will they really stay in business long without other higher markup services?

5) If BMW HQ reimburses for routine maintenance but pays the dealer at or less than your COGS, just like the way medical insurance companies reimburse doctors/dentist at less than their overhead, should they not try to make it up elsewhere?

Look, except for a good will cluster replacement at the dealer in 2007, I have not been to a dealer in over 10 years. However, I think many a times we don't often see the whole picture but only from a sliver of our own viewpoint.

As a final point to this post, I will say it has been increasingly difficult to be caught in the middle of big corporation and the consumer as a business owner. After speaking to many doctors and dentist who have quit private practice because they are squeezed by the big insurance companies and similarly speaking to a friend who owns a gas station, earning 3-5 cents per gallon of gas and being squeezed by the huge gas companies and credit card companies, many go out of business well.

While I don't agree with the prices charged at the dealers, I certainly don't feel the cost isn't justifiable given the overhead we don't necessarily see.

Flame suit on....

Last edited by dvsgene; 09-27-2012 at 01:46 PM.
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  #19  
Old 09-27-2012, 01:34 PM
davethewheel davethewheel is offline
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Quote:
Originally Posted by dvsgene View Post
Yes, these two statements do summarize it from my standpoint. As a newer car owner, the price paid at the dealer is not so bad as one for previous model years.

For older model car owners, I agree, it can be considered a rip off depending on the "conveniences" you get, access to bootlegged GT-1 software, and DIY capabilities but that doesn't necessarily mean they are $tealing from you. As CN90 said. Knowledge=Power.
Of course...who would take their car to an indy if there car is still under warranty? Just saying the stealer charges way more than an indy for the exact same work performed

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  #20  
Old 09-27-2012, 02:25 PM
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doru doru is offline
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Gene, you touched on dentistist & insurance.

I paid 6700 $ this year for a new roof. Lots of work & material. Days of labor.
I paid 7500 $ for a piece of wire to the dentist, they call brace (for my daughter). About 1/2 hr work.

Care to elaborate?
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  #21  
Old 09-27-2012, 03:22 PM
AH673000 AH673000 is offline
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Well.... At $150 / hr at my dealer or zero / hour my garage the choice is obvious around our place. And the 97 BMW still looks like it just came out of the factory because I can use the savings to continuously replace all normal wear items immediately . Open the hood..... All looking like new ..... I am not a fan of any dealer touching anything on any of my cars .... No dealer has your best interests in their business plan . We learns by doing.... And sharing .... Frankly the folks on this forum know more then most BMW technicians in the dealership ..... At a minimum the E39s are 10 years old now .... This group knows these cars the best IMO . Our cars no longer need $150/ hr technicians ..... They are now approaching hobby status . Enjoy them by DIY .
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  #22  
Old 09-27-2012, 03:33 PM
NZ BMW NZ BMW is offline
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My local independent has lone cars, and I even get a BMW... okay, it's an E36 ti but I'll take it for free, it's like driving a little go-cart around town.

They are also located across the road from an excellent cafe which they have cross promotion with, you earn free coffee when they work on your car. It's also proper coffee not that filtered rubbish.

I went to my local dealer once and had an average experience IMO I wanted them to replace my expansion tank and belt, they managed to break the radiator shroud and simply glued it back together, I was especially annoyed as I replaced the shroud a couple of months earlier. So I had to lose my car for another day for them to fix this screw up.

I know they don't break things on every car and this stuff happens at independents also but it didn't fill me with confidence. Sure, they have a nice waiting room but I don't want to wait when I'm dropping my car off I like to be in and out as fast as possible.

I do find my local parts department to be very good and they offer discounts too, which is nice.

Last edited by NZ BMW; 09-27-2012 at 03:34 PM.
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  #23  
Old 09-27-2012, 03:54 PM
dvsgene dvsgene is offline
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Quote:
Originally Posted by doru View Post
Gene, you touched on dentistist & insurance.

I paid 6700 $ this year for a new roof. Lots of work & material. Days of labor.
I paid 7500 $ for a piece of wire to the dentist, they call brace (for my daughter). About 1/2 hr work.

Care to elaborate?
Sure Dorin,

While the health insurance aspect is something which is off topic from BMWs, like most everyone else on the forum, you are viewing from the consumer standpoint. Keep in mind healthcare costs may be entirely different in Canada.

In my reference to dentists/doctors and insurance, I meant from the dentists point of view in USA, they get on average $70 per office visit from the insurance company. That takes an average of 20 mins to see and xray, cleaning may fetch them another $70 for another 30 mins. Sure the dentist may make $140/hr and maybe $250K gross each year working 6 days a week. After rent is paid at $5000/mth, taxes at 50% per year, assistant for $30k-$50k, then add in equipment costs, student loans for recent grads, malpractice or insurance premiums and their own healthcare costs, what's left. Who makes the most money here? Insurance companies collecting premiums and minimizing pay outs.

My point is, many times, while we think doctors/dentists gas stations and car dealers are making out like bandits, I personally don't think they make as much as we think they do after all is said and done. I know quite a few doctors who have decided to join hospitals rather than do private practice given the overhead. It's the big corporations that make millions.

Let's be frank, the majority of people on the E39 forum ARE NOT BMWs demographics, as much as we'd like to think we are. The ideal customers for BMW are the repeat customers who renew their lease every few years and provide a continuous and predictable revenue stream and dealers cater to those specific demographics. In fact, this group of DIYers is probably what BMW does not care for as even the overall markup on parts through various online vendors doesn't even benefit them like it does the OEM manufacturers. Only thing we may do with our 12 year old cars is provide some brand recognition and loyalty.

In the end, I think it's only naturally for a knowledgeable DIY forum like the E39s to be at odds at the dealer costs structure. For for the honest dealers, I think we blow this whole $tealer thing out of proportion.

Last edited by dvsgene; 09-27-2012 at 05:20 PM.
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  #24  
Old 09-27-2012, 04:38 PM
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seemyad seemyad is offline
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Quote:
Originally Posted by dvsgene View Post
At the risk of being flamed for the rest of the thread by providing counterpoints, I wish to preface the following with views strictly from a business standpoint and not a DIY standpoint. Having never owned a BMW franchise, I simply state counterpoints from standard industry practices:

1) If BMW offers a dealer the right to an exclusive sales radius in exchange for for money and the dealer charges more because they need to make up that choice and cost of exclusivity; is that good biz acumen or price gouging?

2) If a BMW dealer trains a mechanic for 5 years by sending them to BMW continuing ed classes every year and on average a mechanic leaves once a year to start their own business using what knowledge was gained at the dealership, is it not justified to charge a bit more for that added cost?

3) Indies are known to buy parts at wholesale pricing from the dealer and mark up 50% on parts to us. While some of us bring parts to save on markups, do many of us consider that added 50% as warranty coverage or simply price gouging? Remember many indies won't warranty parts not bought by them.

4) When indies charge specials for oil changes at almost cost, will they really stay in business long without other higher markup services?

5) If BMW HQ reimburses for routine maintenance but pays the dealer at or less than your COGS, just like the way medical insurance companies reimburse doctors/dentist at less than their overhead, should they not try to make it up elsewhere?

Look, except for a good will cluster replacement at the dealer in 2007, I have not been to a dealer in over 10 years. However, I think many a times we don't often see the whole picture but only from a sliver of our own viewpoint.

As a final point to this post, I will say it has been increasingly difficult to be caught in the middle of big corporation and the consumer as a business owner. After speaking to many doctors and dentist who have quit private practice because they are squeezed by the big insurance companies and similarly speaking to a friend who owns a gas station, earning 3-5 cents per gallon of gas and being squeezed by the huge gas companies and credit card companies, many go out of business well.

While I don't agree with the prices charged at the dealers, I certainly don't feel the cost isn't justifiable given the overhead we don't necessarily see.

Flame suit on....
Good points. They do not validate the ridiculous charges and extremely crooked practices but they are noteworthy for sure.

One would imagine the 5 year trained BMW tech could find and fix a problem quicker than a DIY. If they did that then I would agree they add value. When a DIY takes the car home after being robbed and finds and fixes the problem in a few hours I'd say the 5 years of training was a wasted investment on BMW's part so they should suffer the consequences of their poor investment.



Last week I priced RUBBER BUSHINGS for brake caliper guide bolts.

Every Place But stealer: $12 - $16 per caliper

Stealer: $53 PER CALIPER

Last edited by seemyad; 09-27-2012 at 04:45 PM.
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Old 09-27-2012, 05:40 PM
Pooch528i Pooch528i is offline
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Join Date: Jan 2007
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Mein Auto: 98 528i 06 X3 01 M Road
Well said, dvsgene. I'm a DIY'er who charges himself $0 per hour for his E39. If I was in business I would be out of business within a month. I'm a consultant by day so I charge 4 times what somebody working for an employer would earn. It's just business and not personal. People choose to shop at Walmart vs. a higher end grocery store.
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