Auto shop flat rate
I am going to give you a quick and condensed overall view of how the auto shop business works. This broad picture will give us a starting point to grasp the flat rate concept and how the auto repair charges are calculated. The auto repair business is configured in a way to assure that the auto shop owner makes money no matter what happens. The way the shop charges the customer is based on an hourly rate. This rate is usually set at a very high number, some were between $50- $120 an hour depending on what part of the country your in and economic factors in your area. Parts of New York City and Upscale areas of California are even breaking the $120.00 an hour mark. If you are in a high wage area you can guarantee the hourly rate is near the top of this scale. The auto repair charges assigned to your needed service is based on this hourly rate. The time charged for any given job are supposed to be obtained from a standardized automotive repair labor guide. Auto repair charges example
Now lets start out by using $120.00 an hour as a base line measurement. For example If you need a water pump replaced and the job pays 2.0 hours then the labor charge would be $240.00 plus parts, taxes, auto shop supplies and disposal fees. You can see how this system is designed to charge you the maximum on any given automobile repair. Now here is the evil part. The car mechanics gets paid on average of only about $20 an hour out of the auto shops hourly charge. The mechanic works on a method of payment called flat rate. This means that if the job pays 2 hours the mechanic gets $40.00. If the job takes 3 hours to complete the mechanic still gets $40.00 if the job takes 10 minutes he still gets the $40.00.
Explained this means sometimes you beat the flat rate time and win. And sometimes the job takes longer than the labor time allows, due to various reasons like broken bolts and lack of experience and you loose money on the job. Using the real world example above if the mechanic replaces your water pump and it takes him 20 minutes he still gets paid his $40.00.
This motivates him to rush through the job as fast as humanly possible and move on to the next job and do the same thing over and over again. Rushing like this the auto mechanic is most likely to take short cuts reducing the quality of the auto repairs. The mechanic is concentrating on the money he can make instead of the cars he can fix. In some cases mechanics are competing for the next job sitting in the auto shop parking lot. The first mechanic done his task gets first crack at the next task. It is very easy to get greedy and push yourself beyond your ability to perform quality repairs. What if the car is not fixed properly?
This will result in a comeback where the customer must once again return for an auto repair often related to the first repair. Again the facility tries to turn this in their favor by saying the comeback is unrelated to the original repair and charges you a second time.The auto repair center benefits from this on an accelerated scale. Using this same example the auto shop made $240.00 in labor and paid the mechanic $40.00 and walked away with just a labor profit of about $200.00 in 20 minutes. Then they mark up the price of the parts on average of cost plus 30% and tack on auto shop supplies and disposal fee’s to make their grand total of profit to about $350.00 in 20 minutes.
Next they will multiply this by adding more mechanics and repeating the process from open till close. Hence why most auto repair businesses are open late and run 6 to 7 days a week. This quick incite into the workings of the car repair biz covers the root cause of the problem with entire service business. The flat rate auto repair charges system motivates the mechanic to make the owner money. No where in my last sentence was customer satisfaction or quality repairs mentioned. Unfortunately this would be a secondary concern. Help our car website grow with a The automotive public needs helpThis is why I created a book for the auto service consumer. The education required to protect yourself is available. This next link takes you to the information page about my e-book
guide to auto repair
If you would like to see what the above program looks like I made a screen shot video for you. Take a look at my free auto repair manuals demo page.
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