Car Dealer Clarity: How LED Lighting Reduces Maintenance Costs
Oh, awesome! Another light has burned out! I’m so excited to stop what I’m doing and get this fixed!”
We’ve certainly never said that—and we don’t know any car dealers who have, either.
We know that lighting is a fundamental component of your business. It can create the right mood for the showroom, eliminate shadows and hazards in the service areas, extinguish dangers on the lot, and guide employee work in the office. So, when a light goes out, someone must address the issue, which, most likely, interrupts the workflow. We know that workflow interruptions inhibit productivity and cost you money. And if you aren’t using LED lighting, maintaining other light sources (like fluorescents and HIDs) is actually costing you more than you realize. Let’s see why and how LED lighting reduces maintenance costs.
LED Lamps vs. Fluorescents: It’s All About the Lifespan
Only about 20% of car dealerships in America have fully converted to all-LED smart lighting systems.
This means that the remaining 80% of dealers use some combination of fluorescents or high-intensity discharge (HID) bulbs (or, potentially even incandescent bulbs). Now, generally speaking, the typical LED bulb lasts for a minimum of 50,000 hours, but the typical fluorescent tube only lasts for about 20,0000. This means that in your dealership, you are replacing two fluorescents for what would be every one LED bulb. So, you’re paying for twice as many tubes.
Additionally, you are probably aware that fluorescents require special electrical devices called ballasts in order to function. Every time you replace a tube, it’s likely you’ll also need to replace the ballast—which is an additional charge. LEDs do not use ballasts. So, this means you are paying for additional material that you wouldn’t need to with an LED luminaire.
Now, let’s look at the dollars involved. Fluorescent tubes run about $3 and ballasts are somewhere around $30. So, for about 40,000 fluorescent hours, you are paying about $66 per fixture on average.
Guess how much LEDs cost? We’ll be conservative and say about $10. Ten dollars. You could be paying $10 instead of $66. That’s a saving of $56 per light. Now, just imagine that you have 200 light fixtures that are all running fluorescents. When you multiply the $56 savings by 200 fixtures, you get a total savings of $11,200 for the 40,000 fluorescent hours. Imagine what you could do with an extra $11k!
LED vs. HIDs: The Savings Are Even Greater!
If you’re running HIDs, a conversion to LEDs will generate even more savings when it comes to replacements. Again, generally speaking, HIDs typically last for about 20,000 hours and cost about $15. Like fluorescents, HIDs also require ballasts, which cost about $30. LED replacements for HIDs last for almost 100,000 hours and cost $100—without requiring ballasts, of course. So, this means that for 100,000 hours of light, HID light replacements will cost $225, whereas LEDs will only cost $100. That’s a saving of $125, and, when multiplied by our 200-fixture example, we come up with a savings of $25,000 for those 100,000 hours of light. And remember: this is just savings on lamps! This does not include energy consumption savings, which is even more significant.
LEDs Come with Longer Warranties
Because of their reliable lifespan, LED fixtures also come with longer warranties from their manufacturers. It’s common to see fixtures with warranties of 5+ years, which is something you will almost never see from companies that produce HID or fluorescent fixtures. A better warranty means a better chance of avoiding out-of-pocket replacement costs.
LEDs Also Eliminate Direct Labor Costs
While most dealers can just replace fluorescent and HID bulbs by looking to someone internally, it’s generally not the case with the ballasts. In many instances, these jobs are done by electricians…and the labor cost is about $40 per ballast installation, in the very low end of the spectrum. So, keeping with our previous examples, we would need to add $80 in expenses to the fluorescent scenario and the replacement cost then actually becomes $146 for 40,000 hours of light (and $425 for 100,000 hours of HID light). LED replacements don’t require ballast replacements, so the real direct replacement savings for a 200-fixture dealership ends up being $27,200 in the fluorescent model and $65,000 for the HID replacement for 100,000 hours.
LED Lighting and Re-Allocation of Resources
That is a lot of money that you can re-allocate into different areas of your business. Maybe you can use that money to boost your online engagement. Maybe you can throw some into physical advertising and marketing. Maybe you can give your employees a raise. Maybe you can hire new ones. Or maybe you can keep it for yourself as a reward for making a smart decision and joining the 20% of car dealers who are already on the road to even greater success.
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