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  1. #1
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    Default Would you pay extra to have hauling included for "free"?

    As a dealer, we clearly tell folks that the factory warranty does not include hauling the tractor nor onsite service calls. It covers parts and labor, but the customer must get the tractor to our shop, or pay us to haul it. If you think about it, most items you purchase are this way. But this causes customer frustration on a regular basis.

    Let's first agree that nothing is free. It can be included in the purchase price or offered as an add-on, but if a dealer is hauling tractors for "free", someone has paid for it - and that someone is the end user whether you want to admit it or not.

    If we wanted to offer "free" hauling for 3 years or 5 years, we could try to calculate the cost and add the cost to the price. But then if we found ourselves to be $500-$1500 higher than other dealers we would lose the sale. I can't see this working, nor is it fair to the guy with a trailer that plans to haul it himself.

    We could offer an optional yearly care package for "free" hauling and maybe even "free" regular services. The actual cost would have to factor in customer proximity to the dealership, average hours of use, model, etc. It would need to be a discount off full rate if customers were basically paying in advance, yet the dealer would need to profit as well. It could be a little tricky to figure costs, but that could be done. Would folks be interested in this?

    I'm just looking for some discussion on this, thanks.
    Dave
    Dave's Tractor, Inc.
    Red Bluff, California

  2. #2
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    Default Re: Would you pay extra to have hauling included for "free"?

    You might offer an optional "service plan" that includes hauling for main. and repairs, with some limits. Just like an extended warranty. If the buyer wants it, the buyer can buy it.

  3. #3
    Veteran Member roadhunter's Avatar
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    Default Re: Would you pay extra to have hauling included for "free"?

    Or some sort of AAA type roadside assistance plan that covers towing in the event the tractor breaks down.

  4. #4
    Veteran Member brain55's Avatar
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    Default

    Being a mobile repair guy and having spent 12+ years working in equipment dealerships I'm definitely interested in the feedback you get here.

    There will always be the types that think once they buy a tractor, other than routine maintenance, they should have no out of pocket expenses during the warranty period regardless of what it is for or how you explain it. This is compounded by those that also want the lowest purchase price humanly possible.

    I have considered selling service contracts, but my experience has shown that somebody always feels like they're getting the short end of the stick, whether it is the seller or the purchaser.

    Travel expense is definitely an issue for me. I had to significantly increase what I was charging and be more diligent about charging it. I try to be very fair about it and charge by the mile, instead of hourly, and don't charge for additional trips for the same repair if needed. With traffic here travel time can seem very subjective. I found I wasn't covering my fuel costs so that's why I increased my mileage charge, not to mention getting paid for my time. I also discovered other places I wasn't recouping costs, such as miscellaneous expenses like grease, brakleen, etc., and as a business I had to make sure these costs were covered.

    I found while at the dealers I worked at, there were obvious exceptions to the pick-up and delivery charges for warranty. Such as the unfortunate event of a machine failing right after delivery or a mistake on our end of the repair that showed up shortly after delivery. There are also high volume customers that get the "rules" stretched for them.

    Anyway, enough of my rambling. I'm going to sit back with the popcorn and see where this goes.

    Brian

  5. #5
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    Default Re: Would you pay extra to have hauling included for "free"?

    Quote Originally Posted by DavesTractor View Post
    As a dealer, we clearly tell folks that the factory warranty does not include hauling the tractor nor onsite service calls. It covers parts and labor, but the customer must get the tractor to our shop, or pay us to haul it. If you think about it, most items you purchase are this way. But this causes customer frustration on a regular basis.

    Let's first agree that nothing is free. It can be included in the purchase price or offered as an add-on, but if a dealer is hauling tractors for "free", someone has paid for it - and that someone is the end user whether you want to admit it or not.

    If we wanted to offer "free" hauling for 3 years or 5 years, we could try to calculate the cost and add the cost to the price. But then if we found ourselves to be $500-$1500 higher than other dealers we would lose the sale. I can't see this working, nor is it fair to the guy with a trailer that plans to haul it himself.

    We could offer an optional yearly care package for "free" hauling and maybe even "free" regular services. The actual cost would have to factor in customer proximity to the dealership, average hours of use, model, etc. It would need to be a discount off full rate if customers were basically paying in advance, yet the dealer would need to profit as well. It could be a little tricky to figure costs, but that could be done. Would folks be interested in this?

    I'm just looking for some discussion on this, thanks.
    Adding something else to the cost is just another way to stiff customers and make more money. Out of 100 tractors sold I will venture to say something like 20 might, I say might require transportation during warranty for repairs. If a dealer would refund the added charge after the warranty expired to owners who purchased a tractor that did not need service or continued to provide free transportation after the warranty expired for the life of the product then we are talking about two different things.

    Why not negotiate with a local "Roll Back" Wrecker owner to provide the transportation to and from the dealer. Then you could tell the purchaser up front exactly what a "Service Pick Up And Return Would Cost". This is what a local Green Dealer does. Or, diversify purchase a wrecker and contract with other dealers in your area to deliver and pick up.

    Had to chuckle when I saw the estimated cost increase posted of $500-$1500. You must anticipate at some time selling some real lemons. Most tractors that go back for warranty repairs only go back one time.

  6. #6
    Veteran Member roadhunter's Avatar
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    Default Re: Would you pay extra to have hauling included for "free"?

    That is a good idea to pass the buck to a 3rd party for transporting.

  7. #7
    Veteran Member KiotiKowboy's Avatar
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    Default Re: Would you pay extra to have hauling included for "free"?

    I would have no problem paying to have my tractor hauled for repair - as long as the charge is "actual cost." I don't like the idea of the dealer making a profit while hauling my tractor in for a repair that will also result in profit. I think "on site" repair would be a great option and, for that, I would be willing to pay a little more than shop rates.

  8. #8
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    Default Re: Would you pay extra to have hauling included for "free"?

    Quote Originally Posted by Gator6x4 View Post
    Adding something else to the cost is just another way to stiff customers and make more money. Out of 100 tractors sold I will venture to say something like 20 might, I say might require transportation during warranty for repairs. If a dealer would refund the added charge after the warranty expired to owners who purchased a tractor that did not need service or continued to provide free transportation after the warranty expired for the life of the product then we are talking about two different things.

    Why not negotiate with a local "Roll Back" Wrecker owner to provide the transportation to and from the dealer. Then you could tell the purchaser up front exactly what a "Service Pick Up And Return Would Cost". This is what a local Green Dealer does. Or, diversify purchase a wrecker and contract with other dealers in your area to deliver and pick up.

    Had to chuckle when I saw the estimated cost increase posted of $500-$1500. You must anticipate at some time selling some real lemons. Most tractors that go back for warranty repairs only go back one time.
    Your feedback is appreciated, it truly is as we need to know what folks are thinking. We have a Freightliner rollback as well as other trucks/trailers. We even have a loaner trailer. The loader trailer helps as it at least allows a guy with a pickup to haul his own, although not 1 in 20 customers take us up on the offer. You see, they also see their time as valuable.

    If we picked up and delivered for each service and warranty for 5 years and could do that for $500-$1500 at cost, I'd be thrilled. My average customer is about 35 miles away as I sell in a 5 county area, and it is a huge territory. 70 miles round trip for pickup and then another 70 miles to deliver back so 140 miles. 20 gallons of diesel if the driver is being gentle with the big pedal. $80 for that. 4 hours minimum time for the driver to do the pickup and deliveries, $120 for that if you just figure hourly and workers comp, etc. Wear and tear on a $80k truck, insurance for the same truck, etc., for 140 miles cost $0.50/mile (wild guess on that). So a bare cost of $270 if there are no issues, the truck does not get stopped in road construction, the customer does not want to chat for an hour, the scales don't want to pull you around for an inspection, etc. So with zero profit we are at nearly $300. Do that once a year for 5 years and we have $1500....and that is without selling lemons. Keep in mind if you offer a "free" service of pickup and delivery, some folks will call you out for a broken headlight bulb, so frequency will go up.

    Local rollbacks would be $250-$350 per direction, $500-$700 total. They actually have to profit from hauling, we just try to stop the bleeding and look to, at best, recover our costs.

    Maybe I am mixing service requests with warranty issues, that does complicate the discussion a little, but it is similar.

    Thanks again.
    Dave
    Dave's Tractor, Inc.
    Red Bluff, California

  9. #9
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    Default Re: Would you pay extra to have hauling included for "free"?

    Quote Originally Posted by brain55 View Post
    Being a mobile repair guy and having spent 12+ years working in equipment dealerships I'm definitely interested in the feedback you get here.

    There will always be the types that think once they buy a tractor, other than routine maintenance, they should have no out of pocket expenses during the warranty period regardless of what it is for or how you explain it. This is compounded by those that also want the lowest purchase price humanly possible.

    I have considered selling service contracts, but my experience has shown that somebody always feels like they're getting the short end of the stick, whether it is the seller or the purchaser.

    Travel expense is definitely an issue for me. I had to significantly increase what I was charging and be more diligent about charging it. I try to be very fair about it and charge by the mile, instead of hourly, and don't charge for additional trips for the same repair if needed. With traffic here travel time can seem very subjective. I found I wasn't covering my fuel costs so that's why I increased my mileage charge, not to mention getting paid for my time. I also discovered other places I wasn't recouping costs, such as miscellaneous expenses like grease, brakleen, etc., and as a business I had to make sure these costs were covered.

    I found while at the dealers I worked at, there were obvious exceptions to the pick-up and delivery charges for warranty. Such as the unfortunate event of a machine failing right after delivery or a mistake on our end of the repair that showed up shortly after delivery. There are also high volume customers that get the "rules" stretched for them.

    Anyway, enough of my rambling. I'm going to sit back with the popcorn and see where this goes.

    Brian
    Brian, you have pretty much nailed all the points from a dealer/service guy's point of view.
    Dave
    Dave's Tractor, Inc.
    Red Bluff, California

  10. #10
    Veteran Member KiotiKowboy's Avatar
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    Default Re: Would you pay extra to have hauling included for "free"?

    Quote Originally Posted by DavesTractor View Post
    ... we just try to stop the bleeding and look to, at best, recover our costs.
    Paying a principled dealer, like yourself, to cover his expense should be completely acceptable to most reasonable customers. After all, it saves me time and the expense of purchasing my own trailer. That alone would cover quite a few service hauls.

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