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Comparing Costs: Outsourced BDCs vs. In-House BDCs

Automotive Industry
BCP Editorial

BCP Editorial

11 Mar, 2024
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Thinking about setting up a business development center (BDC) at your dealership? You’re not alone. With high staff turnover plaguing both sales and service departments, many owners and managers are turning to BDCs to supplement their teams.

We’ve written about the pros and cons of in-house BDCs. Now, we’ll take a more in-depth look at an automotive BDC cost comparison to finally answer the question: Which is better when it comes to outsourced BDC vs. in-house BDC costs?

Cost of In-House BDCs

There’s a lot that goes into setting up an in-house BDC. While you’re likely already paying for building costs and utilities, you’ll need to set aside a space for the BDC and pay for various associated costs.

Initial CapEx Investment

First, there’s your initial CapEx investment. You’ll need office space, workstations, computers, and phones for each BDC rep you plan to hire. You’ll need software for tracking leads and scheduling appointments at minimum. You should also invest in automation, for example, technology that automatically responds to connected car alerts or after-hours leads.

Ongoing Operational Costs

Ongoing costs like office supplies, rented equipment, software subscriptions and updates, IT support, additional insurance fees, and infrastructure maintenance contribute to the overall expense of an in-house BDC. These expenses vary based on factors like the size of the dealership and the scope of services offered, but they can be significant.

Staffing Expenses

Hiring and training staff is the biggest ongoing expense for an in-house BDC. BDC reps aren’t salespeople, so you’ll need to hire specialists. Reps usually get salaries, bonuses, and benefits, including sick days and vacation time you’ll need to account for. Then there’s the time it takes to recruit, interview, and train new employees. All of these things can really add up in an automotive BDC cost comparison.

How Much Does a BDC Rep Make at a Dealership?

This is a big question for dealers considering outsourced BDC vs. in-house BDC costs. A typical pay plan for a BDC representative is a combination of a competitive hourly wage and a tiered bonus system. The national average is $18 per hour, but the exact amounts vary depending on your location: A BDC rep in California or New York will make more than one in the Midwest or South.

You’ll also need to add in bonuses for set appointments, shown appointments, and sales. These vary, but a good base might be $10 for set appointments, $20 for shown appointments, and $30 for sold cars. You can also offer bonuses for reaching certain targets, like an extra $750 if 30 cars are sold per month from a rep’s shown appointments.

What about automotive BDC manager salary? Managers usually get an annual salary, plus the same bonuses as representatives. The majority range between $48,000 and $85,000, and the national average is about $70,000, which works out to a whopping $5,700 per month.

Pricing of Outsourced BDC Services

Outsourced automotive BDCs are third-party providers that handle various aspects of the customer journey. Pricing of outsourced BDC services varies, but you should always look for a BDC that provides straightforward information in the following areas.

Setup Fees

Pricing structures for outsourced BDCs typically include one-time setup fees, often equal to the monthly cost of a service. For example, if the monthly charge is $399, the setup fee will also be $399. At Better Car People, we waive setup fees for dealerships involved in certain programs, like the GM iMR program.

Monthly Charges

This is a subscription fee you’ll pay per month to keep the service going. It’s a base price that shouldn’t vary based on your usage or number of leads. The price depends on the service, but it’s usually under $1,000 per month, making this a clear winner when it comes to outsourced BDC vs. in-house BDC costs. Many outsourced BDCs also offer bundled packages. Better Car People has both Sales BDC™ and Service BDC™ packages that cost well under what you’d pay a team of reps at an in-house BDC.

Cost per Lead

Cost per lead is a per-lead fee outsourced BDCs charge for each lead they reach out to. Some BDCs also require a certain amount of leads per month, but at Better Car People, we don’t believe in lead minimums. Depending on the service you choose, we also contact leads multiple times through different channels, providing more bang for your buck.

Contracts and Termination Fees

Finally, watch out for the fine print when it comes to service contracts and termination fees. Much like a cell phone company, some outsourced BDCs lock you into a contract and charge you to get out of it. That’s another thing we don’t believe in here at Better Car People. Just give us 30 days notice and you’re good to go – even though we’ll miss you.

Outsourced BDC vs. In-house BDC Cost Comparison

So which is cheaper, outsourced BDC or in-house BDC? When you consider both up-front costs and the total cost of ownership over time, the pricing of outsourced BDC services wins. Think of it this way: At the national average, you’re paying BDC reps $3,000 per month just to show up.

Let’s say they’re booking 6 appointments per day, 3 of those show up, and 1 results in a sale. At the amounts we gave above, that’s an extra $150 – per day! Assuming 22 work days in the average month, that comes out to $6,300 per month for each BDC rep. Large dealerships get hundreds of leads a day, requiring multiple BDC reps plus a manager to handle it all.

With an outsourced BDC, even if you’re paying thousands each month, you’re still coming out on top. That’s because of an outsourced automotive BDC’s cost efficiency: You don’t need to pay for space, equipment, and most of all, staff. Plus, it’s flexible: You can scale up and down as needed instead of leaving staff sitting around when business is slow.

Get More Bang for Your Buck with 24/7/365 BDC Solutions

There’s a lot to consider if you’re thinking about setting up a BDC at your dealership, but when it comes to outsourced BDC vs. in-house BDC costs, outsourced is the winner. Better Car People gives you clear advantages like:

  • 24/7/365 lead response within 10 minutes
  • 90-day follow-up process
  • Integration with your CRM
  • Flexible pricing
  • No contracts or lead minimums

We do it all with live, on-shore agents who are automotive experts, backed up by our proprietary platform. We’ll work seamlessly with your existing processes, and you won’t have to deal with staffing or training. Book a meeting with us today to see just how easy it is to integrate an outsourced BDC.