It's understood-independent shops need up-to-date diagnostic equipment to compete with dealerships and franchises. But is the high cost of high tech going to bury the small garage in monthly payments? SSGM investigates.
You run an independent garage and your customers are bringing in late-model cars. The latest generation of diagnostic equipment is the only way you can analyze the car and start the fix in anything like a profitable time frame. You decide it’s time for an equipment update, but which way do you go? Do you pick an all-in-one workstation that diagnoses everything, or a modular hand-held tool system that might not cover every repair situation? The difference can mean thousands of dollars, and they both have their advantages.
“There’s a couple of different ways to measure profitability,” says AutoXray president and CEO, Bill Miller. “One is, how efficient is a guy at getting to an actual fix, how much diagnostic time is spent. On a lot of jobs, shops don’t feel comfortable charging diagnostic time. So the faster they get through a diagnosis, the better.”
Time is the issue. All the major manufacturers of diagnostic equipment claim their systems will save critical time assessing the car, making the repair faster and more profitable. The smaller shop has to decide which diagnostic tool format will get the job done the quickest in his environment, and which will pay itself off the fastest.
Affordable hand-held scanners are one option. While they don’t offer the all-in-one solution of the workstation, they are portable, flexible and cheap enough to buy outright. Miller explains some of the issues around scan tool pricing: “Most scan tool manufacturers buy chips from Motorola, but Motorola does not make parts for scan-tools. There’s just not enough volume in the world to create a chip specifically for the scan tool guys. They make them for the car guys. So what happens is, as the car and technology changes, Motorola won’t support the old parts, but the scan tools have to support all the vehicles. We’re supporting 1994 vehicles while Motorola is manufacturing chips for 2003-4 vehicles. We don’t suffer any of that obsolescence because we own all of our intellectual property that is built into our product. And we’ve amortized it over a large volume.”
The latest hand-held scan tools offer on-line upgradeable software, plus upgradeable hardware, so despite their lower price point, they aren’t disposable. Admittedly, this type of diagnostic equipment may not be able to handle ten percent of the repairs that come in, but with quick set-up, the ability to diagnose several aspects of a problem at once thanks to portability, plus an attractive price, the other ninety-percent is where the profit is.
“Somebody has to do that ten percent,” says Miller. “You may have that tool to do that ten percent, but you’ve paid $5,000 for a tool which will cost you an additional five minutes in set-up on ninety percent of the cars that come in. Now you’ve paid more money and you’re not saving the time on the diagnostic side of it.”
So how do the all-in-one workstations stack up to the low cost hand-held solution? William Boynett, technical trainer and demonstration expert at Snap-On Tools has an answer. “Hand-held diagnostics take you to a certain level, but they don’t take you to a full-blown engine analyzer, a comprehensive analyzer,” says Boynett. The type of equipment Boynett is referring to, the workstation, can handle all the car systems, while acting like an information center that can create files on the vehicle and even print out diagnostics for the customer. The workstations can also be wirelessly networked in the shop while multitasking on different things. It’s really a shop management system.
Boynett stresses the importance of marketing in making diagnostic equipment profitable. He calls it, “buying a chunk of time” from the customer. What you do with that diagnostic time has to not only pinpoint the immediate problem, but also give the car a bumper-to-bumper check-up that the customer can carry away in a disk or paper format. The perceived value to the customer of having the car thoroughly assessed in writing, generates repeat business. Says Boynett, “The days of saying ‘that’s screwed and we have to replace it’ are gone. You can’t live like that anymore.”
“You have to tell the customer there are things right about his car. You have to have a “pass” list, you have to have something that needs attention in the next 30-90 days, then you have the list of things that have to be attended to immediately. At that point, you have something in a printed format-what I like to have is a checkmark, a question mark and an exclamation mark. I should be looking at tires, brakes, suspension, exhaust, wiper blades, even the air conditioning system. They are all profitable. Like going to a doctor, this is a file on your car at this time with all the information on it.”
A workstation with integrated hand tools like Snap-on’s can costs thousands, but Boynett stresses that the equipment can generate $300 an hour, making it possible to cover the monthly lease payment in eight repairs, and generate clear profit from there. As a turnkey management system, the machines allow the shop to keep track of all their customers, and even send out mass e-mailings for upcoming service specials and maintenance reminders or a simple Chirstmas greeting.
The message from the manufacturers is that high-tech means high-profit. The diagnostic equipment keeps getting better, easier and faster to use, making the turnaround time on repairs lower.
The latest technology in vehicle diagnostic systems eliminates time consuming snags in dealing with technical information, training materials and system integration issues. Delphi’s new DS800 computer implemented vehicle diagnostic system, is an example of a solution that wirelessly connects to the Internet so that service personnel and technicians can access diagnostic information, technical data and training right in front of the car, and right when they need it. Is wireless the way of the future? “Yes,” says Delphi’s Michael Simon. “It is here today, and hence no longer the future.”
The ‘open architecture’ of this product connects many of the existing shop tools and systems, such as the shop management and information formats. As an addition to the shop, it creates a smooth flow of information that allows various systems to communicate to make repair and management more efficient.
All these products are designed with a fast learning-curve. The manufacturers know that time spent training is time lost repairing. Says Will Sampson, director of sales and marketing for the automotive aftermarket at Midtronics, “Our goal is to build the training into the product. If you can’t open the box and connect the tester and do the test, we haven’t done our job. User interface is a key in making a smart purchase decision. It doesn’t matter if it is a 100% solution if you can’t use 80% of the capabilities.”
The bottom line is, an independent garage has many options in making a diagnostic equipment purchase. It is worth the time to let the manufacturers’ rep explain his product fully and outline its advantages. Look at your equipment budget and your customer traffic. How many repairs will it take to make the monthly payment? Will the equipment make the shop so much more efficient that it will pay for itself? Is it more cost effective to equip yourself for the majority of repairs, or can you afford the equipment to diagnose everything under the sun? And will the equipment become obsolete in two years? Also ask the rep what customer service features the equipment will add to the shop, like e-mailing capability or take-home assessments. You know you are going to have to buy it, so find the diagnostic equipment mix that can make you leaner and meaner, not poorer at the end of the month.