Friday Rant: Honda of Downtown Chicago and the Great Urban Dealer Maintenance / Service Ripoff

I’ve had a couple love affairs in my life. One has been with what I believe is one of the best vehicles on the market: the Honda Odyssey. (Yes, I am a terribly boring person, I admit it.) But our family is currently on our third Odyssey, if that is any indication of our loyalty and my passion for the product, even if I don’t encourage you to ever buy a used minivan from me (or anyone else for that matter)!

However, there is a dark side to Hondas, at least in Chicago. And that is the lack of how American Honda Motor Company polices dealer policies on maintenance pricing and terms — and customer engagement. Even if you are not a Honda owner — or if you live in a more reasonably priced locale — stay with me for a minute here, as there are multiple lessons in the story for anyone who takes their car into dealers for routine service.

The 300% (or more) Price Difference for Routine Service

To wit, earlier this week, we took in our 2019 Odyssey (with roughly 7,500 miles) to Honda of Downtown Chicago for what is known as a “B Service”.  There was also a tire pressure light check system on (and some other faults).

Something seemed wrong when within an hour of dropping off what was essentially a new car, I got a call from the service manager.

He wanted my authorization for a $279 “B Service” as well as $169 to diagnose a tire pressure fault (if the fault occurred because of our own driving, not Honda’s issue). I immediately asked him for a discount as I told him the price seemed high and he granted a 10% on the former without hesitation — a “wildcard” discount in his language.

OK, small price concession noted. But the pricing was still not sitting well with me. So in the next minute, I called another local dealer, Honda City North, who we had used before for service on a previous car.

I explained the situation to them and they said the pricing seemed much higher than what they would charge for a B Service (which should cost between $40-$100 depending on tire rotation/balancing), and they said the $169 diagnosis fee was not something they would charge at all for a vehicle that was still under a new car warranty, even if the fault was my own. They would diagnose the issue for free, and they would expect other dealers to do so as well, they noted.

So I called the gentleman service manager back at Honda of Downtown Chicago and asked him how they justified their pricing. It was a lovely conversation, resulting in a somewhat antagonistic one-way rant in which the service manager accused me of being the one at fault by daring to question the pricing. Finally, the service manager accused me of not asking the right questions to the other dealer, so I suggested, why don’t we call them together?

Surprisingly, he obliged.

Letting Suppliers Debate Their Pricing

I joined in Honda City North via conference call and they told the gentleman at Honda of Downtown Chicago exactly what he had told me: that the B Service would be between $40-$100 depending on tire rotation (or not). But then the service manager at the Honda of Downtown Chicago dealer got testy. He challenged the other service manager on the line to cost out exactly what he did for a B maintenance. And then he accused him of not following Honda Maintenance protocol. Then he challenged him on being able to pay his workers a reasonable level because they do not charge for diagnostic issues which cannot be rebilled to Honda.

As things got more heated, I interjected and asked the service manager with the more reasonable pricing to drop off the line, thanking him for his time. Before this, I was on mute and absolutely dying of laughter.

After the other dealer hung up, I then told the Honda of Downtown Chicago service manager to cancel the service order, as their pricing for the same B maintenance and service diagnosis was at least 3X higher depending on whether the tires needing rotating or not and whether they would charge us vs. Honda the diagnostic fee (and possibly as much as 8X higher in this latter case with a tire rotation needed).

The next step should be clear by now: we made a beeline for Honda City North.

Summary and Key Takeaways

For those considering an urban dealer for service, please take the time to do your pricing homework. You might be genuinely surprised what you discover — and even more surprised at how the dealers respond when defending themselves from what a reasonable party would consider comparatively exorbitant like-for-like pricing.

All told, my time expended in calling around to a dealer to confirm pricing levels — and to listen to a debate between two service managers, including one who was borderline angry in trying to justify at least a 300%+ premium — was fifteen minutes.

Lessons learned:

• Honda’s North American management arm does not regulate dealer behavior on warrantied vehicles (or if they do, it is not consistently enforced).
• Urban dealers such as Honda of Downtown Chicago with downtown locations in cities may attempt to charge a huge premium for routine maintenance and to diagnose system faults which other dealers would do for free (compared with dealers just a few miles away).
• Read social media and peer reviews ahead of time. It turns out the $169 “diagnostic” charge for in-warranty cars is standard at this dealer, though unheard of at others.
• Take your sourcing skills from procurement and apply it to situations like this — do a should cost model, benchmark suppliers, even have suppliers discuss pricing live, etc.
• A few minutes of time invested could save you hundreds of dollars (or more) and provide you with a good laugh at the same time.

Finally, I just need to state it for the record: perhaps certain Honda dealers feel ripped off that their cars are so reliable that they need to find ways to improve their margin for routine maintenance and the occasional fault diagnosis. At least for American Honda Motor Company (compared with the alternative of building unreliable cars), this is a good problem to have and an easy one to address.