Welcome to another edition of the Car Dealership Guy Industry Spotlight Podcast Recap newsletter—the key lessons from top operators, founders, and execs shaping the future of auto retail.
Today's guests include Rob Scott, Executive General Manager of Bob Johnson Auto Group, and Robert Wooden, founder of Wooden Automotive Consultants.
Together, they discuss how dealers can maximize profitability through strategic labor rate increases and parts reimbursement optimization while maintaining strong OEM relationships.
Parts departments are overlooked profit centers.
The parts department remains undervalued despite being essential to every aspect of dealership operations, from service to reconditioning.
"Without them, nothing gets fixed. And generally speaking, they're not appreciated. Nobody really understands what they do. Nobody really wants to understand what they do. But they really are, they're pivotal." — Scott
Investing in parts department efficiency and pricing directly impacts overall dealership profitability.
Transparency builds customer trust in pricing.
Clear communication about pricing helps customers understand value while maintaining competitive positioning in the market.
"You have to be transparent with the customers, and most customers understand there's not anybody in your service department or your sales department that doesn't get a paycheck." — Scott
Customers appreciate honesty about costs and generally accept fair pricing when value is clearly demonstrated.
Proper documentation prevents costly rate increase failures.
Poor repair order documentation is the primary reason warranty rate increase requests get rejected by manufacturers.
"Nine out of 10... There's... Maybe I can be a little too critical, but maybe it's eight out of 10, but there are more poorly documented repair orders than properly documented repair orders." — Wooden
Even customer pay repair orders should be written with warranty-level documentation standards to protect future rate increase opportunities.
Discounting control directly impacts profitability.
Uncontrolled discounting by advisors and parts staff can significantly reduce effective labor rates and parts margins.
"Discounts is a huge thing. A lot of managers are not paying attention to that and allowing their people just to discount stuff that they have no idea what's going on." — Wooden
Setting up DMS restrictions and requiring manager authorization for discounts protects margin integrity.
Presented by:
1. Wooden Automotive Consultants - Using their proprietary analytics program, Fixed Operations Intelligence, Wooden Automotive offers a free rate analysis, a $1500 value, so you know what rates your store qualifies for before committing to anything. Go to fixedopsintel.com and drop us your contact info.
Manufacturers aren't adversaries in rate increase requests.
The relationship between dealers and OEMs around pricing should be viewed as a business partnership rather than an adversarial negotiation.
"The factory is not your friend, okay? Again, they're your partners, but you're in a relationship with them that yields benefits for both parties." — Wooden
Profitable dealers serve customers better, which ultimately benefits the manufacturer's brand and customer retention.
Professional rate increase services provide significant ROI.
Specialized warranty uplift companies deliver measurable results while eliminating internal resource burden and documentation risks.
"My most recent parts lift in one of my stores is $7,000 a month." — Scott
The investment in professional services pays for itself through higher success rates and time savings for dealership staff.
Repair orders are legal documents requiring precision.
Every repair order should be documented as if it could be reviewed in court or by regulatory authorities.
"That repair order is a legal document and it needs to be treated that way. So make sure that we're documenting things properly." — Wooden
Proper documentation protects the dealership legally and ensures successful warranty reimbursement rate increases.
Delaying rate increases costs dealers millions over time.
Many dealerships avoid requesting increases for years, missing out on substantial cumulative revenue that could fund facility improvements and employee retention.
"We just had a client, an import client, that had never done a parts increase. Very high volume in a major market. And we did the analysis, and it's going to be $1.2 million a year net...It's been 15 years or more that they could have been having that revenue." — Wooden
The compound effect of missed rate increases can represent decades of lost profitability that directly impacts competitiveness.
Initial rate offers may not reflect full entitlement.
Even when documentation supports higher rates, manufacturers frequently respond with reduced offers to see if dealers will accept less than they're entitled to receive.
"We just had a Honda dealer the other day that we documented 95% parts markup. And Honda came back and said, we're going to give you 72. And the dealer's like, well, I think that's good. It's better than 40%. Like, no, it's not good because it's 20 percentage points less than what you're owed." — Wooden
Accepting reduced offers without pushback leaves significant money on the table and sets a precedent for future negotiations.
Geographic location doesn't determine rate potential.
Rural dealerships can achieve rates comparable to major metro markets when they focus on facility quality and customer experience rather than location-based assumptions.
"Major metro areas tend to have higher rates, but that's not always the case. We have some dealers in some more rural areas that are in the 300s, right? It depends on the facility and marketing." — Robert
Customer willingness to pay premium rates depends more on trust and service quality than on dealership location or market size.
