How your auto repair shop should price parts and labor

Unfortunately . . . there has been little useful oversight
in the automobile repair industry and many shop owners and
managers have had little formal business training. Many shops
that consider themselves completely honest do not follow the
'best practices' described above.

A common deviation concerns labor . . . the shop will factor labor
times up so they can maintain a lower posted labor rate. As an
example . . . a labor operation listed at 2 hours might be bumped
to 3 hours. This way the shop could maintain an artificially low
posted labor rate of $50 per hour. A shop down the street may go
by the book with a posted rate of $75. The same repair at either
shop would cost $150 . . . but if you were only looking at the
posted rate you might be tempted to think the first shop was
offering the best deal.

Some shops do not use published labor times at all . . . but
instead rely on the shop owner's experience . . .

The reason why these are 'best practices' is because they are
defensible and are repeatable. As far as labor is concerned, they
are defensible because a third party is providing labor times
based on actual time studies, repeatable because the labor times
are always the same for a particular repair.

Labor for repairs should be clearly described on the repair order.
Labor times should be 'by the book' (Mitchell1, Alldata, Motors,
Shopkey, or the manufacturer) without factoring. Labor charges
can then be calculated simply by multiplying book time (flat rate)
by the shop's labor rate.

Parts should be identified on the repair order by name and
manufacturer, or if OEM by name and number. As a general rule
OEM parts will cost more than aftermarket parts.

What can you do?
Ask around . . . Call a few shops in your area, ask what their labor
rate is and then ask if they use a standard flat rate guide to price
labor . . . like Alldata or Mitchell1. Ask what their price would be
for the maintenance or repair you need. Ask for a breakdown of
parts and labor. A conscientious shop might tell you that they
cannot provide accurate information without seeing your car, but
they can provide a 'typical' price for your make and model. Ask
for it.

Compare what different shops say. It will take some time, but
you will probably come away with a pretty good idea which shops
are price fairly and which shops do not.

You can also subscribe to Alldata diy for your make and model
vehicle ($26.95 per year in '08). The subscription focuses on
repair procedures but includes repair times and even parts
pricing for many procedures. If you are mechanically inclined I
highly recommend it. There is an online demo . . . check it out.
You can access Alldata from our 'Links' page.

If you have done all this, picked a shop,
taken you car in for repairs and the cost of
the repair is higher than expected . . . Before
you sign the repair order or give verbal authorization . . . ask the
shop to justify parts pricing. Ask the shop how many hours labor
they are charging and at what rate. Ask the shop to explain
differences between what they told you on the phone and the
actual quote. Ask about incidental costs.

If what the shop says seems to make sense . . . or if they lower
their quote to something more in line with what you expected go
ahead and authorize the repair. Otherwise you should consider
taking your business elsewhere (keeping in mind that you
probably will be responcible for diagnostic charges).