I do my best writing in very short bursts, usually as comments on posts from writers far more talented than myself. Perhaps that’s what led you to follow me and/or subscribe to whatever this is. My posts have been sporadic, and I do feel a certain amount of guilt for not fulfilling whatever expectations you may have had when you clicked on the Subscribe button.
Today’s post is the first of a kind of an extended comment on things I’ve observed over the course of the first quarter of this year. Hence the title. I’m not an expert on much of anything, other than arranging ones and zeroes into patterns to make iPhones and iPads do interesting things. But I notice things, and noticing gets me to thinking, which leads to what you are reading now.
A few days ago I took the car in for routine service, the usual oil change and tire rotation. Several times a year it’s offered at a sale price, coupled with a “free” inspection, in which they hope to find things that need repair or replacement. Our car was new in 2021, and has yet to see 5,000 miles of use. We’ve did our traveling prior to retirement, so all driving now is local, and it’s limited to shopping and family events.
The dealer special for this service a few years ago was $50. Then $80. Now it’s $100. Inflation, don’t you know. Our dealer is a very big one, probably one of the 10 largest in the nation for our brand of car. They move a lot of cars. As I drove onto the lot I was surprised at how many cars there were. I also noticed a new row of cars parked behind signs marked “Clearance”. These were older, not quite beater-class, but the sort of car you might buy for a new driver. We checked in, barely getting out of the car before they had it whisked away to the shop. No line this time. After writing it up, the advisor gave us the price and said there would be a 3% charge if we paid by credit card. This was new, and very surprising.
As a former retailer, I know that virtually anyone who accepts credit cards for payment has to pay a processing fee. Typically this ranges from 2% of the sale up to 5%. The larger the sale, the lower the rate, but some businesses have to pay more because they carry higher risk. This particular dealer has been in business for many years, and has never had a surcharge for credit cards. Why now?
The clues were all there. Lots of cars on the lot means sales are down. The waiting area had only two other people in it. Usually it can be hard to find a seat. The service typically takes an hour to an hour and a half, due to the volume of cars coming in. We were quoted 45 minutes, and were on our way home in 30.
Car prices now are so high that most people have to finance the purchase. Interest rates have made that much more expensive. Car dealers don’t make that much on actual car sales, but service makes up the bulk of their revenue. Folks who have been using credit cards to take up the slack will put off repairs as long as possible. My guess is that this very large dealership is now having to get another 3% out of each service charge just to keep going.
So while the media may be telling us that times are good, the economy is booming, I’m seeing a very large car dealer, in a very large city, implementing procedures that are utilized by retailers when times are very tight. I don’t trust the media, or the government, but I do trust my eyes.