Why Are You Still Charging Diagnostic Fees?

Staying Competitive in the Service Drive

By: David Lewis

With the growing number of secondary repair shops competing for dealership customers these days it is hard to understand why so many service departments are still charging diagnostic fees.  Today’s informed and Internet savvy customers have learned the art of ‘shopping around’ and, though they have every right to do so, it makes little sense to equip them with the information that could ultimately cause many of them to go elsewhere.  Sometimes all it takes to do that is to charge diagnostic fees.

If You Don’t Know the Problem, Why Quote the Cost?

Here is the problem with this.  When people call in looking for estimates on fixing their vehicle it is not uncommon to get a price quote or a response like: “We charge $99 per hour for a diagnostic”.  What the person starts doing at that point is adding up how long they think it might take by the amount of the hourly charge. They could then deduce that if the diagnostic took three hours and the repair ended up being $700 they would have spent $1,000 on getting the repair done.  Armed with that information they can start shopping around and calling other shops asking how much they would charge for a diagnostic or how much for this or that service.  They would almost certainly find someone else who would offer a free diagnostic and/or a lower repair price in the process.

Consider this analogy:  If I were to come to your dealership and, for a cost of $2,000 offer to send you 100 customers who would come to your Service Department with known mechanical failures or repair needs and all you have to do is sell them a repair service, would you give me the $2,000?  I am certain your answer to this would be a definite Yes, as you would welcome all of those opportunities.

So here is the point of my analogy: Don’t charge for diagnostics!  There are two things you need to bring up that can stop them in their tracks and get them to come in for an appointment:

Customer:  How much do you charge to do a brake job on a 2010 Honda Accord?

Service Advisor:  What makes you think you need a brake job?

Customer:  When I apply my brakes my car pulls to the right and I hear a funny noise.

Service Advisor:  That might be as simple as a minor adjustment.  Why don’t you bring the car in for us to look at?  If it is a minor adjustment will fix it and send you on your way.  If is something more elaborate we can give you a written estimate and you can take that home and decide if you want to complete the repair.

Get the Chance to Earn a Customer

The goal is this: you now have them in your dealership and you now have the opportunity to give a professional service evaluation and gain the chance to earn them as a customer.  If you had given this person a price over the phone and they shopped that price, all someone has to do is beat it by a few dollars and you will lose the sale.

This is not rocket science, but so often Service Managers have not trained their people in the right way to deal with the job of appointment setting.  Getting customers to come to the Service Department is the first priority and giving price quotes or doing diagnosis over the phone is certainly hazardous to your profits. 

“What makes you think you have that problem?”

There is an expert on every corner willing to give someone their opinion on any number of topics including vehicle service and repair.  It might be someone from the caller’s family or a neighbor down the street.  Maybe the guy who doubles as a shade tree mechanic at his workplace or even the conclusions they themselves came to after a night of searching DIY mechanic sites on the Internet.  But whatever it is that has made them think they know what the problem is, wouldn’t it be better for them to come in and find out for certain?  Stop giving prices over the phone and eliminate the diagnostic fee and you will probably make a solid appointment to get them to your Service Department.


“That might be a minor adjustment.” 

Follow that up with this second statement: “That might be something as simple as a minor adjustment.  Why don’t you bring the car in us to look at it and if it is a minor adjustment will fix it and you can be on your way?  If it does need a specific work we will give you a written estimate on what needs to be done and you can then decide if you want to move forward with the repair.”

Do that and you have just taken away any motive they might have for shopping around and any solid reason to shop elsewhere since they do not even know for sure what the problem really is.

Too often we make it easy for our competition by giving potential customers price quotes based on uncertain information.  Giving a price quote over the phone or charging a diagnostic fee almost guarantees that they will shop around for someone who will give them a price quote or at least a free diagnostic. It is worse than putting the cart before the horse.  It is like giving the caller both the cart and the horse and telling them to use it to take their business elsewhere.

Those who think the incredible expansion of secondary repair providers into their territory is just luck might want to think twice about that.  Quoting prices or diagnostic fees over the phone is putting out the red carpet for your competitors and saying, “Come and take my customers.” 

Offering free diagnostics certainly gives you a chance to compete and, when your Advisors or Service BDC reps know how to answer this kind of customer correctly, you will see more business coming your way.  This is especially true if you are the first place the customer called in their search. By not giving prices over the phone and by eliminating a diagnostic fee that cost them money before they even find out how much they are going to spend on the repair, you have taken away the reasons for price shopping.

Don’t Take Business for Granted

When it comes to the modern service industry, shoppers have more options to choose from than ever before.  Franchises are popping up everywhere and more and more are dotting the landscape as repair shops fight for the vehicle maintenance and repair service that is out there to be had.  Those dealerships that take it for granted that previous buyers or those who own their brand of vehicles will come to their Service Department are only fooling themselves.  It is a competitive market and if you are not strategizing for ways to get customers into your service lanes, you are probably feeding the shops of those who are.

So again let me ask you:  “Why are you still charging diagnostic fees?” Maybe you are not doing that and if so I say ‘Bravo!  But if you are there is no better time to stop doing it than right now. And do not forget to check your website in case you have any information or menu for services that would give shoppers the idea that you charge for diagnostic fees. 

Make a definite effort to train your advisors, BDC reps or other appointment setters to focus on getting their customers in the service lane at your dealership.  This is where the business starts and where you have your best opportunity to convert them into a customer who will use your Service Department every time they have repair or maintenance needs for their vehicle.