Auto Parts Price Gouging??

jerry_njAugust 14, 2005

This is related to another thread, but is presented here in a summary conclusion/question form.

I recently had an exhause part price represented to me by a "trusted" local mechanic (on a first name basis) at $270. He charges $65 per hour labor (lower than the car dealer and Midas I think). In his/all pricing I assumed a parts price mark-up, you know handling and the like, of 15-20%, some of which would come from a price discount the mechanic gets from the parts house, that is I'd pay more than he if I went to the counter and purchased the part myself.

I didn't like the sounds of the part's price so I checked on the web (earlier RockAuto thread) and found I could get the part delivered to my home for $130. I then went to the parts house from which my mechanic quoted the parts price and they'd sell it to me for $170. I then called Midas, the place I have had exhasue work done for years, they said the part would be $300. Clearly with the volume Midas does they could beat the $130 price I got. Midas charges a stiff labor charge too.

My conclusion: parts are marked-up by as much as 100%, maybe more in some cases, by the mechanic or his shop.

This is a clear case of GOUGING in my mind and I hope this "press" gets some people thinking. After about 30 years of not doing exhaust work, I can afford to have someone else do it, I'm back doing my own exhaust work.

Are there any other examples of sales/service to the public that gouge, as a normal aspect of business, as is shown in my example above? For comparison, if you hire someone to put up a fence for you and you look at the cost of the materials, they are similar to what you'd pay if you put the fence up yourself.

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Actually, this is just another clear case of someone looking at price only, and not what it takes for an automotive repair shop to generate the profit required to simply keep their doors open! Without opening the books to show you the expenses related to tools, equipment, technicians, training, benefits, insurances, licensing fees, taxes, heat, electricity, the building, and on and on. By only looking at the cost of "some" of the materials consumed in the course of a normal service routine, and attempting to draw a conclusion from that you are forgetting that "fair" is a two way street. The facts are that competition between shops has been so fierce, for so long that many of them are forced to attempt to staff with undertrained personell. They often attempt to perform services that are actually above the technical expertise of the employee's as well as the shops tooling, equipment, and information system. So you want a reason why people have cars that "no-one can fix"? It's largely because of single sided arguments like the one you have started here with this thread, and the fact that shops and technicians first had little or no voice in these types of disscussions, and/or they simply chose to ignore them because it's almost impossible for them to win a debate like this.

Why do we have to apologize for needing to turn a profit, and earn a living? There are people out there that make more money in a month, than my shop will do in gross sales dollars for an entire year! Most of those people wont have anywhere near the capitol investment that I presently have in tools, training, etc. and they also (in all likelyhood) wont spend as much to keep them selves up to date in their field next year as I (or any other top shop/technician) will.

FWIW, the mark-ups your comlpaining about are perfectly normal in this field. Take them away, and we will have to make choices. Raise the labor rates to replace the lost profits that the parts sales were generating, reduce expenses by cutting staff, benefits, training, and updated tooling and information. Go from the 60+ hours a week I work now to 80+ or 100+. Or we could simply close the doors and go out of business and then you can take your car and park it because you wont have a shop near you capable of servicing it when it breaks. Of course, with the attitude and intention of your post, maybe you don't deserve to have someone capable, let alone willing to fix your POS.

    Bookmark   August 14, 2005 at 12:27PM
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Good threads come from pro-and-con (even Con), whether or not I deserve to be subjected to misrepresentations. In the first order this is what this post was about, not price or hidden cost. I do find it interesting however, that someone in the business would admit to such inefficiency as to require such pricing to be able to stay in business. As for overhead, my cardiologist gets $200+ per hour when I go in for visit, but he must pay a few hundred thousand a year in insurance costs, what does an auto repair shop have to pay? I don't believe the autotech needs as much invested in education either, or tools. And as for this post, it takes more brawn than brain/training to change an exhaust pipe. As for the local mechanic, his overhead is low, and I think he has been laughing all the way to the bank. The several repairs I've had him do over the years have all been minor and the parts were so well advertised, alternator say, that to charge twice the price would immediately set off an alarm from any informed buyer. As for Midas I've always viewed them as part show and part skill, skill in at the car lift, show at the counter where you get told what you need and how much. I have just taken it because I had better things to do that do the work myself, and I could afford it, many/most can't.

The real sad thing is most of the people taking in older cars to be fixed are those least able to afford high prices, the "rich" people trade up every few years and never even get to the point of needing to buy tires.

I can tell you that if I couldn't run a shop with a loaded, and stated, labor cost of $65, that's low, to $100 per hour, I'd give it up before I'd misrepresent the cost of parts. I bet most of the people who come in are making less than $35 per hour loaded salary, i.e., what they cost their employer.

In fact now that I know it is general practice, no just my poor sampling, that part prices are misrepresented I will write to my congressman and complain about the lack of "truth in advertising" practiced in the auto repair business.

    Bookmark   August 14, 2005 at 1:31PM
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I discovered the same thing a few years ago.I use to give a local independent shop my business.He gets his parts from a local Napa.I let him replace several exaust systems and other repairs.

I had a alternator go out one day.I called the local Napa to see what a new one would cost.It was going to be around $130.00.I then decided to not mess with it my self and went to this independent shop as I had for many years in the past.He called Napa and said it would be $180.00 for the same alternator plus labor.At that time his hourly labor rate was $30.00 per hour.He wanted to sock it to me for $210.00 if he could do the job in one hour and more then likley it would take 30 minutes or less but he charged for a full hour thats just the way that works.I do not have a problem with that however.

I said I will go and buy the Alternator my self and bring it over to him.With a Big Grin on my face.He never seen the humor and started in with his cost to do busines and keeping the lights on and all that BS.

I decided to just replace that Alternator my self.That was a few years ago and I never went back to his shop.I also spread the word around about his business ways and how he would have made $80.00 rather then the $30.00 he would have been intitled to.

I understand this is not just his shop.They all are more then willing to Rip people off.But that was the last time they were allowed to do it to me.

    Bookmark   August 14, 2005 at 1:42PM
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That must have been along time ago, only $30 per hour. Most of us would be happy to make that now, in 2005. And, a reasonable mechanic probably does, even today. This may be with benefits, not paycheck amount. So that means the shop makes $40 or more per hour profit on the mechanic they hire, or if they run their own shop they make that too. That's okay, running a business involves risk and investmenet. So why do they "need" to charge a large parts mark-up and not even tell the customer the "cost" of your parts really isn't the COST (this implies what the shop paid) it is my PRICE with, by the way, is around double what the part cost, understand of course the stravation wage I'm charging of $75 per hour has to be suplemented somehow, how about doubled or tripled somehow? The case in point that raise my ire:
Exhause part cost $130 Price $270 > Markup $140
Labor $65 per hour claimed rate, takes 40 minutes, charge $65.

Apparent labor cost (remember I could pick up the part myself, so there's no saving to me having the shop do that)
in this cast $205 per hour, loaded of course. Now if the time was really 40 minutes, well you do the arithmetic.
Now tell me again why I should "understand" all the pain and suffering of running a repair shop.

    Bookmark   August 14, 2005 at 3:27PM
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Believe it or not, your helping me make my point. Let me answer each point the best that I can.

"I do find it interesting however, that someone in the business would admit to such inefficiency as to require such pricing to be able to stay in business."

What inefficiency? Do you somehow think we should be able to physically do not just more, but much more work (maybe two or three times) as much in a given amount of time in order to make ends meet? Our industry, through the use of labor guides have created workers that are commonly among the highest efficiency workers you will ever find in any field. Thats one of the reasons people don't normally get to talk to "the mechanic", distractions can impact efficiency in more ways than just what the couple of minutes away from the car causes.

"As for overhead, my cardiologist gets $200+ per hour when I go in for visit, but he must pay a few hundred thousand a year in insurance costs, what does an auto repair shop have to pay?"

That varies of course depending on the size of the shop, the number of techs, and the type of work that the shop does. The smallest of all shops properlly insured will be spending around 10K a year, and thats with NO EMPLOYEE's. How many employee's does your cardiologist have? Remember they actually have an impact on insurance costs.

"I don't believe the autotech needs as much invested in education either, or tools."

Through the course of his career, a master technician by todays pricing will have over $100,000.00 dollars in his education. Remember schools are normally held during working hours, and it would be wrong to not pay the man his time while at school, and thats on top of the cost of the school, plus while he is at school, he's not directly adding to the shops bottom line! A four hour seminar often runs $300.00, and a full day one can be $500.00 or higher. Shop owners also need to go to school, because the demands of todays business require solid business techniques that are only learned in the classroom. There is one company that I know of that the program runs $15,000.00, with subsequent follow ups every two years, at an additional cost. Of course in the perfect world, every shop owner should have a four year business degree, but hey nothing is perfect. As far as you believing it or not, there is only ONE WAY to prove it beyond all doubt. Open a shop, and put your money where your belief is. If you make it, then you would suddenly be a rich man, wouldn't you? IMO, any hesitation on your part from this very second suggests you don't actually believe it's really as easy as you want to say it is.

"And as for this post, it takes more brawn than brain/training to change an exhaust pipe. As for the local mechanic, his overhead is low, and I think he has been laughing all the way to the bank."

Thats part of the problem, a good portion of the work we do is physical in nature. But there is much more of it that is mentally challenging, and it's getting harder all the time. Plus it takes very specialized equipment to even be able to have access to some of the systems on todays cars. Which takes us to your local mechanic. You think he is laughing all the way to the bank, but remember to be fair. Do you really know for sure every detail of what it costs for him to open his doors each day? Of course unless your his accountant, (oops, theres another !@#$%^ expense) you really don't. Besides, as I have said in other posts, there is more than one way to run a repair shop. If he is truly putting all of the money in his pocket, that means he is not buying and supporting the tools and equipment and getting the training to stay up to date with the newest cars. That simple fact assures that when there aren't enough of todays older cars left around, he will be out of business, and nothing will change that. You as a consumer can only hope that the forward thinking techs/shop owners have been able to invest in their businesses and stay up to date, even in the face of the pressure price market, or else they will be gone too.

"The real sad thing is most of the people taking in older cars to be fixed are those least able to afford high prices, the "rich" people trade up every few years and never even get to the point of needing to buy tires"

First, the rich people, we can't sell them a service that they don't want or need so they take themselves right out of the picture. The poor people, what are we supposed to do, go bankrupt trying to run a charity for them? Should we do stuff for them below our cost, and then turn around and raise your price to actually pay for it? Or should we simply attempt to operate a proftable business, and have each customer pay for the service that they get? What would YOU do with your money? Do you give it away, or do you try and make it work for you? Once again fair is a two way street, don't expect someone else to do, what you don't, or won't. FWIW, there are times that I step up and help someone truly in need, and I take it directly out of my pocket. That works out to a few thousand dollars every year, thats not a tax write-off. I can't write off my time, but my time has value, especially when I'm spending it with someones car. Tell me that you give away anything more valuable than your time, just because you want to help someone that really needs it. And yes, I have given away complete repairs, parts and labor when I decided it was a worthwhile gesture. But like all things in business that actually would have been money that could have been spent on a school, or maybe some more tools that would help me be even better at my career.

"I can tell you that if I couldn't run a shop with a loaded, and stated, labor cost of $65, that's low, to $100 per hour, I'd give it up before I'd misrepresent the cost of parts. "

Well, the simple answer is you can run a shop middle to below average technically equipped, at $65.00/hr as long as you AVERAGE another $65.00/hr profit on the parts you sell. Take away the parts profit altogether, and that means you will need a minimum of $130.00/hr labor from each tech, (industry average is 3.4 techs per shop for independents). From a business perspective with todays cars, you'll be on schedule to go out of business in about ten years with that model. Keep that in mind.

"I bet most of the people who come in are making less than $35 per hour loaded salary, i.e., what they cost their employer"

Tell me if that makes any difference to their plumber, heating and AC tech, dentist, eye care, or any other professional service they need. We can't change the costs that we have beyond choosing what we will do in the shop, and what we wont. You see I wont buy support for BMW's at some $18,000 for ONE tool that I would require. I wont buy support for Land Rover, $21,000.00 for ONE tool! I have chosen to buy tools to properrly support GM, (almost $6000.00 to date, tool and subsequent updates), Chrysler $8000.00, Ford $4000.00, Honda and Toyota $11,000.00 combined, and mostly enhanced, but commonlly generic and incomplete coverage for most of the rest of the cars on the street another $7000.00 to date. Now the best part, I bought most of these without making more than $20.00/hr over the last 7 years, and I of course pay all of my own benefits being that I am self employe'd. Remember as well, we havent put numbers on rent, major shop equipment (lifts, engine analyzer, brake lathe, tire equipment, etc.) None of which can be had without first realizing a profit, and all of it having a limited lifespan meaning it's only a possession until the day it is no longer usefull and it finds a home in a garbage dump. A better way to explain this is with a mental image.

Open the paper, and pick out a brand new $200,000.00 house.
Buy it, and pay it off in ten years. During that ten years, you cannot live there. You can rent it out and make back a portion of the money, except you have to spend just about every penny of rental on up keep. At the end of ten years, you can now only use the house for parties and social events for two years. After twelve years, open the paper again, and buy another house, say $300,000.00. Plan to pay this one off in ten years just like the other one. Oh, and take the other one drop the insurance and burn it to the ground. You now have a pretty good idea of what it's like today to run a shop that you don't think should be able to make a profit. But thats OK, you dont actually have to buy the $300,000.00 house, you could call it quits...

"In fact now that I know it is general practice, no just my poor sampling, that part prices are misrepresented I will write to my congressman and complain about the lack of "truth in advertising" practiced in the auto repair business."

Truth in advertising? What are you talking about? Parts prices are not being missrepresented. The sale of parts is meerely a portion of how the total profit required to run a shop is generated. If you somehow force a shop to not turn a profit on the parts they sell, then they have no choice but to generate 100% of the profit that they need to survive on the labor. So what do you gain by forcing that change? You'll still have some shops that will be investing in their businesses for the long haul, and you'll have some that are not, and they will be on a path that leads them to failure at some point. What would government intervention do, except lower what efficiency the shops presently have by having to follow all of the laws, and spend time documenting that fact to prove it. Lowering efficiency would ultimately have to result in increased pricing, just to maintain their present level. Or from a consumers point of view, force shops that would otherwise slide until the close to either get out now, or spend money they don't want to in order to be tooled up like the ones committed to the long haul. Either way, government intervention results in higher pricing than you presently see. Hey you know maybe governement intervention would be a good thing, and just like you cannot buy a new furnace and install it yourself, maybe you should not be able to purchase parts at a parts store.

So, BTW lets take this to another level. What do you do, and what can the public at large do that could save them money for the goods or services you, and/or the business you work for provide? What about all of those poor people that cannot afford what you do? What's the government going to do about You? After all you do laugh all the way to the bank. I'm sure of it......

    Bookmark   August 14, 2005 at 4:32PM
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Customers don't like paying for diagnosis, they don't want to pay for the time they spend describing the problem they are having with the car, and they don't want to pay for special tools and special training. This thread suggests that auto repair shops are trying to make up for losses on repair jobs that require extra time for diagnosis, access, and repair, on jobs that are more straightforward. As cars are designed and built with more complex electronics, the problem will only get worse. Is there a market for a car with just enough electronics to run the engine efficiently, but missing the extra devices like power windows, power seats, and high-tech dashboard display?

    Bookmark   August 14, 2005 at 6:31PM
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This can turn out to be a rather long thread in a hurry. VBG. It's hard to not get windy when attempting to explain many of the points being made. But Oh well, no sense making this even longer on just that now is there....

BTW, I missed this on the last response:

"Good threads come from pro-and-con (even Con), whether or not I deserve to be subjected to misrepresentations."

Missrepresentations is what the entire idea of trying to deny a shop the right to turn the profit that the shop feels it needs on the parts to survive. Your representing that some number that you feel comfortable with, is all they should use, but your doing that without the full knowledge of what they actually need. Basically your pulling the number out of thin air, but not considering that the result would have to be an equal change in the shops labor rate with no net savings for the consumer. In fact, let me explain one thing further. Most towns and cities have mercantile taxes, and business priveledge taxes. The parts are taxed under the mercantile, and for us, thats .5%. The labor is taxed at 1%, so forcing a smaller parts profit, and moving those funds onto the labor portion of the bill, actually results in an increased tax burden to the business of .5% of the amount that was moved. Over time this is a significant amount, and would be passed onto the consumer as (are you ready for this?) part of a price increase!

You have to remember turning a profit on parts sales has always been part of the way shops generate revenues. Every attempt at claiming it's wrong has always tried to focus on ethics at some point, but ignores the one true base fact. What we sell is a service, if you don't need us to sell you the service as in you can do it yourself, congratulations, good for you. But if you need us, then we first have to be there for you, and then be able to do it at a profit or we wont be there the next time you need us. How we decide to arrive at the final bottom line that we have to get every month is a whole set of business decisions, concentrating on one or two aspects and trying to claim ethical faults dosen't really accomplish anything, except make you either angrier, or contribute to the loss of choice for you some time in the future when you will need to use the service we sell. You see there is no such thing as a successful business, there are only businesses that haven't failed yet. Keep a watch on the auto repair shops around you. For every three that close, you might see one try to open. Like it or not, the number one reason is there are too many of us, and that results in most of us being way too underpriced for all of us to be successful for the long haul. The town I'm in right now has two dealerships, both owned by the same guy. Four years ago there were three, owned by three different families. We lost our Chrysler store completely. Four years ago there were fifteen shops in a three mile radius, and we had four parts stores. Now there are eleven shops, five of which are clearly failing, or going out of business soon due to retirement, and only one parts store. The impact of the ones that are going under is lower average pricing! They have poor business practices such as not investing in their businesses. There is no good reason for these guys to throw money into a sinking boat. Thats why they don't buy all the new tools and equipment that they should be. It's also funny, they are the ones that allow people to carry in parts! Lets face it they just don't know any better, and it's contributing to their demise, actually hastening it! It all goes back to the fact that to stay in this business you not only have to be efficient, you have to be productive, and profitable at a level that allows you to continually reinvest in your business. They are doing none of that, they would make you happy with the way they price their labor and mark-up their parts. Too bad they won't be in business for very long, then again maybe thats why you have been so moved to start this thread. You must have been going to someone like them, who either dissapointed you because of a loss in ability to provide quality service, or maybe they closed the doors.

My shop has a number of fatal flaws in my business plan, at the same time these flaws give me an operational marketing edge that give me a competetive business angle. But like I said, they are fatal flaws and in many ways every day at work is a dance with the devil. Just watch as I lay these out.

Fatal flaw #1. First I don't own the property, I lease the building, and inspite of some communication with the person that does own it, little progress has been made in changing that. My lease has me with full control of my right to continue my rental, however the landlord could some day turn around and change my lease to reflect his idea of what my business is worth and attempt to change my rent to one that reflects my business value over that which the property should generate without me. Once again if that would happen, that would result in a price increase to my customers, with no net, or visible increase in value to them over what they presently recieve. It would be completely up to me to decide if I pass that increase on in the form of a labor rate increase, or a parts profit change, or some combination and yes that means a greater mark-up on the parts than the one we presently use. Now the premise of your posts suggests that is unethical, but as a simple cause and effect, rent increase (business expense change) to increase in the average mark-up of the parts we sell, it really makes for sound business standards. The trick here is the only other way to generate more revenue, would be to do more work, but there are only so many hours in each day, and if you try to work too much then you make mental errors and end up going backwards.

Fatal flaw #2. I am the ONLY technician. If something happens to me whereby I cannot physically produce, everything falls apart overnight. There is no workmans compensation, I'm the owner, a sole proprietor, the states workmans compensation program won't touch me with a ten foot pole...This however is one of the flaws that is a strength. Everything done in my shop is done by me. There are no suprises, no comebacks due to workmanship, no training deficiencies. I'm totally responsible for quality, productivity, and efficiency.

Fatal flaw #3. My wife is actually unemloyable outside of the reality that is our family business because of a handicap. Epilepsy. Under the umbrella created by me as the business owner, and the technician we can carry that burden. Not as if we really have a choice though do we? Medications that she requires to achieve the level of control of that her condition is presently at, force us to pay $1200.00 a month for our healthcare in order for her condition to be covered, as well as keep the co-pays manageable. Suprisingly it's cheaper for us to insure each of us seperately than it is to cover us under one policy as a husband and wife! $400.00 a month cheaper! And to think, if I charge $40.00 for a part that cost me $19.00 I'm EVIL!!! (I know thats getting facetious)

Fatal flaw #4 Trying to stay up to date on as many cars as I presently do. The cost for me last year just to stay close to the vehicle base that I did five years ago was $25,000.00. That is a consumable expense. It's like writing off cash. (remember the example of the house you don't live in, thats a very real analogy) The reason is, this is a projected expense for me EVERY YEAR FOR NOW ON in the form of new scan tools for the new models that each manufacturer comes out with, as well as software to update the tools I already have for as long as they support the cars that I get to see and work on. Eventually each of these tools will see the cars that they support dissapear, and the tools themselves will become useless even though each will represent thousands of dollars (10K+ in most cases) of an investment. The tool will litterally be worthless as anyone that wants to keep one of these cars that the tool supports will probabaly be looking to buy one on e-bay and want to purchase it for pennies on the hundred dollars, and probably get it too as someone somewhere will take what they can get out of the all but dead tool. The problem is many shops, in fact most shops are not investing in their businesses this agressively. They have their reasons (ideas) I have mine. That's what competition is all about.

Fatal flaw #5. We have nothing saved for retirement, and I mean nothing. We spend every penny on tools, training, equipment, othen seeing dozens of things we should have, and schools I should attend hopelessly out of financial reach.

Fatal flaw #6. As good as I am at fixing cars, I truly hate working for someone that first does not know how to do it, and worse has little or no business training to know how to help me do it at a profitable level fo me. So how is that a fatal flaw? I'm no different than 99.9% of everyone else that has opened a shop of their own in the last 25 years. I don't have a business degree, I've never attended one of the big corporation training programs. I pretty much run by talent and experience at fixing cars, and follow the advice of some other very generous shop owners around the country in reguards to figuring out what my CODB, thats "Cost Of Doing Business" is, and between them and my accountant, figure out how to price my labor, and my parts in order to generate the income required to be successful. BTW, my accountant will be the first to tell you, my prices aren't high enough to make it on a forty hour week. My accountant also says, my part mark-ups should be higher in many cases! Although, actually he'd be like the second or third because my wife and I are extremely aware of how many hours a week are required to do this. BTW, you can also cherish the idea of a vacation if you get one. There is no such thing as a vacation for me, but I do try and give my wife days off as often as I can, because being self employe'd is more my dream, and need than it is hers. I have had four days off in the form of a real vacation in thirty years of fixing cars. Even when I worked for someone else, I would "cash my vacation time in" so that we had the money for family needs, as well as tools and schools.

Fatal flaw #7 I'm a poor people manager, hence one of the big reasons I work all by myself. Maybe given time this could be a skill I could develope, and maybe if suddenly physically I could not actually do the work myself I may have to. For now it's a flaw that I know of, that I have to work around to be successful, or saying it correctly, enjoy continued success, because as I said earlier, there is no such thing as a successful business, there are only businesses that haven't failed yet.

Fatal flaw #8,,, This is the scariest of all, because I don't know what it is. In fact, it's probably more than one, it's likely a list that is hundreds of things long. Everything from EPA issues, to economic pressures to who knows.

So what does all of this really mean? And beyond that, what's it got to do with your statement about "price gouging on auto parts"? All of these things contribute to the picture in a way that impact how we price out the service we try and sell. Once again, we don't sell parts, we sell a service and take a significant risk to do so. The prices we charge people for the parts are simply a component of how we get to the bottom line. If at the end of the month we paid for everything, and earned a living, then we are doing good. There are no guarantee's that at the end of the month there is any money to pay all of the bills. Thats the risk we choose to take. People think we are rich, and laughing all the way to the bank. If having a hundred bucks in my wallet make's me rich in someones eyes, well then maybe sometimes I am. If' being able to have to credit to buy just about anything I want means I'm rich in someones eyes, well let me just say thats the banker laughing, at both of us.

Do you really want me to tell you if I am rich or not? I'll tell you. I have a wife that I love, have been married to for almost 26 years, and a beautiful daughter that will be 23. I get to go to work everyday and do something that I truly love to do, fix cars. At the end of a long day, as I turn out the lights and get ready to lock the doors I say a very private thank-you to the person that made all of this possible. There are many days I don't have a dime in my pocket, even though I mark up parts as much as the market will allow, but I know I'm rich because being happy, and knowing I made my customers happy is priceless!

Now what was that you were going to write and tell your congessman? Hey maybe you can just cut and paste this, it will save you some time typing......

John Gillespie ASE CMAT L1

    Bookmark   August 14, 2005 at 7:29PM
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The shop I was mentioning is not the certified dealership of a paticilur brand.Example GM or Ford.If it was then the labor rate would be more like $50.00 per hour or more.It was a independent shop.The owner and the guy who is the head mechanic but he mostly stands behind the counter and counts his money.While his greaseball greasemonkey gearhead employee does most of the work.He is fairly good but is young and learning the trade he might have finished highschool?He is replaced with a completely new gearhead about every 3 months.He makes maybe $8.00 per hour and has no benifits.

That Alternator job if I would have let him do it.Would have paid that kids salary for the complete day.While his fat boss behind the counter.Lined up the next job for that long day.I have nothing against him making a profit but he does not need to make it all in one day.He lives in a Mantion of a house and drives big expensive vehicals.His kids do also when they turn 16 and his wife does not work.Tells me he is making to much.

    Bookmark   August 14, 2005 at 7:53PM
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What the hell is wrong with people, always expecting "something for nothing" ...For the shop owner/mechanic the clock is always running, the same as it does for other professionals...and I do mean professionals !
Jerry, I agree with some of your argument - maybe the exhaust cost can be lower, but the next car that enters the shop may have a rattle problem or an erratic lack of smooth drive-ability - do you charge $800 plus if it consumes a full day ???
And the time it takes to secure and stock parts - should this be a freebie ???
And I was in business at one time - few if any men have any idea of the cost of doing business unless they were in business at one time and succeeded.....

.......................copied............................. I don't believe the autotech needs as much invested in education either, or tools. And as for this post, it takes more brawn than brain/training to change an exhaust pipe. As for the local mechanic, his overhead is low, and I think he has been laughing all the way to the bank.

This is uncalled for !! I have seen the houses that the shop/owners have - not so great at all ..These men work hard for what little they do have !!
And, Jerry, what do you do for a living that you can judge so harshly ???

    Bookmark   August 14, 2005 at 7:53PM
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Well John G. you may not have a BS in Business, but you do in witting. As for what do I do to reduce cost, I get more efficient, I'm an electrical engineer with many years experience in R&D and International Business and Trade. I can assure you this field has been hit hard by the ability of management to "off shore" to India a lot of computer and other support work. We have all been burning the extra hours, and not at time and a half or even straight time, just working to stay competitive. I have advanced degrees in engineering and have many colleagues with Ph D. degrees in engineering and computer science. None of them, nor I as an engineering manager, come anywhere near your "loaded" rate for a auto repair when the parts mark-up is added in. Even with International travel several times a year, added into the cost of doing business, we don't hit a loaded salary cost that even approaches $200 per hour. That's over $380,000 per year counting only 48 weeks for work. We figure our fully loaded rate for an engineer is under $200,000. And this rate includes the cost of benefits, office space, and executive management. After that is said, we have to deliver a product and service in a global economy that is of the highest quality and at a competitive price. I know what it costs to keep up on education and the cost and the time it takes, more that a few days a year in a classroom.

And where is you the economy of scale in auto repair, you talk like a big shop has to generate more per mechanic hour than a small shop, if true you have too much management FAT. When big business figures out how to connect the auto to a computer link to India we'll start seeing diagnostic cost cut in half or more. The only thing you have saving your job is you're in the service industry, hands on service industry.

As for truth, if the mechanic is going to charge me $200 per hour, tell me so, don't bury the cost in an inflated cost of parts. In the minimum this will allow me/others to do an informed make or buy decision without having to pull our car back while we research the true loaded costs were going to pay. I may well be why we're are not told forthrightly.

The case in point is anything but as you describe the successful shop and EricWI may be right, this guy will be out of business in a few years, but if he isn't drinking or shooting up with his profits it will not matter. The job he quoted me comes in at over $200 per hour. He has a bay in an old gas station that sells enough gas to pay the guy at the pump, and pay the "electricity" and taxes, I'd bet. His office hasn't been cleaned since the builder left some 50 or more years ago and he furniture is well beyond anything anyone would accept as a gift. As far as test equipment goes, I have some better "stuff" in my shop. Now the guy is likable enough and I have said many times very intelligent and he has done a good job on belts and a few front end repairs on car over 12 years old. I have newer cars too, but they don't go there because they don't need repairs.
But when the expected happens, breaks and exhause: STAND BY !

The only information I'm getting from the defense of the hidden profit in parts is the shop is making too much money, not the mechanics, for I know you're not paying them $10K per month plus benefits, and even that wouldn't account for the cost I've been quoted and, sadly, paid many times.

    Bookmark   August 14, 2005 at 7:59PM
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Hum, back again. I was writing while more was coming in.

JohnG, I'd like to have you in the neighborhood, and I am very impressed with your writing skill and devotion to your business. I am persuaded that at you are one of the "good guys". Thanks, and sorry this thread forced you to write a well though out well expressed treatise on running a business and one in the cross-hairs of my ire. But, it seems writing is easy for you, unexpected characteristic/skill for a mechanic, or engineer.

I think your writing work is worth saving, and I'm sure your auto repairs are too. That said, would you charge me $270 for an exhaust pipe that cost you less than $130, and for which you would charge another $65 labor to install (I'm assuming the time is less than an hour or you'd charge me more if it took more, but unlike Earthworm's scenario in which I am expected to help pay for some problem diagnostic that cost you a full day's work and gave me no benefit).

But, sorry, I still think asking a customer to pay over $200 above the true cost of parts to a mechanic to change one length of exhaust pipe is too much, and especially so when he advertised yourself as being honest and less expensive than the big shops, well maybe he is, Midas quoted $300 for the pipe.

    Bookmark   August 14, 2005 at 8:28PM
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Bear in mind that labor rates vary according to the region you are in.

Here is what I've seen with my own eyes:

Mt. Lebanon, PA a suburb of Pittsburgh: $45/hour
Manassas, VA a suburb of Washington, DC $70/hour

Here is what I've heard about:
Berkeley, CA: $130/hour

Not surprisingly, Pittsburgh, PA has a lower cost of living than Washington, DC which in turn has a lower cost of living than Berkeley, CA.

    Bookmark   August 14, 2005 at 9:12PM
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John G. This is for you. Most of the numb skulls out there
that " phone around " get the prices of the " white box "
parts. Nice and cheap in price and very cheap in quality.
If they last a year they're lucky. I know you know what
" white box " means. $65.00 per hour ? where do people get
labour rates that cheap ? We had labour rates at $75.00
per hour (canadian) 10 years ago. That is about $110.00 U.S. Almost all exhaust parts are stainless steal from the
factory. You can get a nice painted iron one for less than
half the cost that should last 1 year. You get what you pay
for. Don't have the time to pick this apart but will leave
this to the very qualified JOHN G

    Bookmark   August 14, 2005 at 10:18PM
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What I was asked to pay for was the same part, from the same supply house. That's exactly my point kalining (a.k.a. num skull) if labor is $110 per hour just tell me don't charge me big mark-up on a given/identical part, and call it the "cost" of parts, especially if you look me in the eye and say "this part is real expensive" then let me stand by while you call the parts houses, at least two and write down $270 and $275 for the two price "quotes" received. When, it turns out the price given was much, much less. This is clear misrepresentation.

    Bookmark   August 14, 2005 at 11:17PM
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An engineer, I should have known.... VVBG....

Being able to write stuff is a pleasure for me today, that I didn't grow up with in school. I really am grateful to the people who's vision created the web, and the PC's that we use. I can actually type some three times faster than I can write. Oh, and my handwriting isn't even legible to me, hence the nick in my e-mail "cardoc". I've always been told my writing is so bad I should have been a doctor! :)

First point. "You'd like to have me in your neighborhood." Well, you do, I'm there. You just are using the wrong criteria to find "me". I might be a little younger, or older, taller, thinner, but "I'm there", Seek me out!! It's funny, my shop is in a town of about 7000 people, and within ten square miles there are probably some 30,000 people. If there are 2000 that "know" me I'll be suprised. Yet inside the automotive world I am well known, virtually around the "cyber" world.

2nd point. "We figure our fully loaded rate for an engineer is under $200,000. And this rate includes the cost of benefits, office space, and executive management"

Sometimes engineers should stick to driving trains.....(It's a joke, VVBG)

This is a very real part of what you do, work to be more efficient. So do we, but being physical, and hands on, plus having to give so much time in face to face interraction with the customers productivity can really suffer even though efficiency can exceed 200%. My projected yearly gross sales will be just under 1/4mil. FWIW, I'm throwing out real numbers for you. Play with them all you want, and work the math out. You probably do your own taxes, find the rates for a sole proprietor and start plugging the numbers in and see what you end up with. If you need , I'll throw some more of my real number monthly expenses. Tell you what during proofreading, I thought about gasoline prices, and what heating oil is going to cost me this year. I think I'm gonna be sick..... ;(

Going back to your exhaust prices, they are almost exactly what I would charge for delivering that service. In many ways the easy work subsidizes the harder work that I(we) do. If we lose the easy work to someone that does it cheaper, the end result isn't that the customer saves money. We would ultimately have to charge more, much more for the work that we do get, or else dissapear from the market place. Like I said a while ago, it's a shame we have to apologize for trying to earn a living.

#3. "But, sorry, I still think asking a customer to pay over $200 above the true cost of parts to a mechanic to change one length of exhaust pipe is too much, and especially so when he advertised yourself as being honest and less expensive than the big shops, well maybe he is, Midas quoted $300 for the pipe."

Then you simply take your business elsewhere, and no hard feelings. But you need to hope and pray that enough people don't feel the same way that you do, and they pay the prices that I HAVE to charge. Why? Because I need the easy work to help keep my shop open, so that I am there to even attempt the harder work. I suppose that's one of the hidden fatal flaws that I alluded to earlier.

We really have serious price pressure dynamics in this industry. In a perfect world we could charge two or three times our present labor rates for the difficult work, and cut the prices in half for the easy stuff, like exhaust. But the "market" simply does not allow for that. We have the chains, Midas, et al that look at the market, price just below us, higher entry level, or mechanics with limited abilities, but are capable of performing this level of repair and they turn a pretty handsome profit for the corporation. But if you have a real technical issue with your car, they have no interest in employing a technician capable of solving that problem, nor are they going to invest in the tools and equipment for that. Your either going to have to head back to the dealer, or find someone like me that has a desire to support your choice of vehicle. Or you can go to one of the undertrained, underequipped examples like johndeere mentioned and take your chances...

JohnDeere,,,"The owner and the guy who is the head mechanic but he mostly stands behind the counter and counts his money.While his greaseball greasemonkey gearhead employee does most of the work.He is fairly good but is young and learning the trade he might have finished highschool?He is replaced with a completely new gearhead about every 3 months.He makes maybe $8.00 per hour and has no benifits."

Ohh, what an ugly picture. But it's all too much a reality, and people go to these shops because they think it will save them $10.00. Government intervention will probably not get rid of them either because some consumer group will insist "they save the consumer money". Using regulations to force them to "clean up" themselves, the building, their act, whatever would only serve to double or triple their CODB, and result in higher prices from them, and then less price pressure for me. It's up to the consumer to decide if thats what they want or not. Of course most consumers do already have the power to choose. My survival as a business relies on that fact.

Note to engineers:

The answer is not always "reduce cost". Sometimes the cost is already so low, that quality is struggling.

    Bookmark   August 15, 2005 at 5:11AM
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John G,
As a kid growing up in New Jersey, my parents had a local garage that employed the local teenagers to do repairs. After all, what kid COULDN'T rebuild a GTO engine? But today I wouldn't let those teenagers anywhere NEAR my truck! I paid over $30,000 for it and I want someone that knows what they're doing to look at it! The local gas station with the grease pit in Succasunna NJ is long gone!
And being self employed as you are I know it's far different than drawing a paycheck! And being in a business where I too know the cost of merchandise (be it auto parts or wood) The 100% markup is NORMAL unless you deal in volume. And I won't even go inro Midas or those other shops where the "tech" works on commission instead of a salry.
But since I escaped to the North Country the local repair shop is the Ford/Mercury/Jeep/Chrysler/Dodge dealer. (3 garage bays, and a showroom so small they can only get one car inside!) And like you, the techs are all ASE certified. I look for that before I even let them pop the hood!
But I also see that in more urban areas the dealers are crying for qualifird techs. I see $2,000 sign on bonuses. And salries can in the $50,000 range. But they have to have KNOWLEDGE. Not the teenager of the mid 60's from Succasunna, NJ.

    Bookmark   August 15, 2005 at 7:47AM
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Okay, you've given me a plausible answer to the exhaust problem that triggered my post. As stated, I have had several small jobs done by the subject shop, and nothing in those, cost of parts or hours charged triggered any reaction. I can't say the work inexpensive, but I wanted the guy to make a living. I haven't gone back to look up each bill, I still have them as I keep complete maintenance records on all my vehicles, but I may and I am comfortable that the price I paid for an alternator, say, or a clutch, wasn't a blow you away mark-up that the exhaust pipe had.

I also have two local, not dealer, shops that have the tools and training you have, and that's were I've had the clutch work done. In fact the owner of one shop takes great pride in the training and equipment he personally has acquired. I've been to his shop only once, and that was when my truck, now replaced with a new Chevy Colo, didn't pass NJ emission tests. In this case there is a charge, up front for diagnostic work, $65 as I recall, and one pays that regardless of having any work done or not to fix the problem. In the case of the truck he fixed it for very little more, I suppose my total bill was under $200. I did have a drivability problem too, which he didn't seem interested in fixing: you may know the problem: a Dodge Ram50 2.8L, 1988, purchased new. It was running too rich under load, caused by (I'll call it) gas metering on the right hand barrel. Searching the web, and talking with other "shade tree" mechanics I was advised until I could rebuild or get someone to rebuild (good luck on the second option, maybe when we can off shore carb rebuilding) the carburetor I could plug the right side venturi, it worked, at least the truck ran well enough, and the patch was a clear test result. Yes I was one of those teenagers who could rebuild a GTO engine, I just couldn't afford the GTO, so I rebuilt the engine in my Chevy. I've put on more than one set of dual exhaust pipes too.

Well, all I can say, JohnG, keep up the good and honest work, I'm sure you're a valued member of your community.

One final for "kalining", get your exchange rates straight, you've got them backwards, the US $ is worth more than the Canadian $, You said: " We had labour rates at $75.00
per hour (canadian) 10 years ago. That is about $110.00 U.S. " The approximate correct answer being $75 Can Translates to approximately $55US, and I suppose the top shops did charge about that much 10 years ago, maybe a little more.

    Bookmark   August 15, 2005 at 8:49AM
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But Jerry!

You've posted untold number of questions on this and the Tools Forum on how to repair your xost, how to use various tools, how to proceed with the job, how to...., how to....., whatever.....

You're job still isn't done.

Reminds me when I was kid. A mechanic spent less than 5 minutes fixing me up (forget the problem now). I axt him, "How much do I owe you?", he said, "Nuthin, forget it; you ain't got that much money." That remark wasn't lost on this child.

    Bookmark   August 15, 2005 at 4:03PM
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You caught me red handed (faced)!

Indeed I have asked related questions, and shot at the cost of parts, including asking about a supplier RockAuto selling over the Internet, which looks to be the best deal, even buying directly the Internet is $40 less on a $170 (local price) part. That's a big discount. And, as I have three car and a pickup, the pickup being a new Chevy Colorado, I'm in no immediate need to fix the old "girl", a 1990 that gets great mileage. NJ has been real hot and humid, I'm not about to lay under a car in that condition. I have ramps to put the car on so working on the font end is elevated a bit, but still an "on the back" job. That's why I haven't done any exhaust work in 30 years, but I'm going to do this one.

I grew up on a just above the "poverty line" culture and we always had to do with what we had, and without it if it broke. Then we figured out how to fix some things, including cars, so we found we could (just barely) afford to fix them ourselves and did. It's hard to break old tight fisted money handling taught in the "school of hard knocks".

    Bookmark   August 15, 2005 at 4:22PM
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Set a box fan to blow on you while you work. Keep ya cool and the mosquitos off same time 10-4?

    Bookmark   August 15, 2005 at 11:24PM
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"I don't believe the autotech needs as much invested in education either, or tools."

Well if thts the case why dont you do it yourself? Its not an easy job to diagnois a car problem it takes time,tools, manuals which all cost money. If fixing cars were so simple many people would be doing it themselves.

    Bookmark   August 17, 2005 at 6:58AM
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Gee, GooOleBoy, Sorry I just didn't know autotechs were to most educated people in the word, so much for the myth about rocket science and brain surgery.

As for doing it myself, I am in the case that started this discussion thread, and it doesn't take a lot of education or skill, it is just work I have had others do for many years, but not this time. I decided $100 per hour in my pocket, tax free is too good to pass up, much as I don't like the work. And this low hourly wage assumes it takes me three times as long as the professional mechanic who has a car lift, I don't, no surprise.

    Bookmark   August 17, 2005 at 9:36PM
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Auto techs are the most under paid skilled labor job that require schooling there is.They make about 10 dollars in the independent shops and maybe 14 dollars at a dealership.You would have to really like working on cars to do that.When you can go to school the same amount of time and be an Electrician and make $35.00 per hour.

    Bookmark   August 17, 2005 at 11:44PM
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Posted by: Jerry_NJ (My Page) on Wed, Aug 17, 05 at 21:36

Gee, GooOleBoy, Sorry I just didn't know autotechs were to most educated people in the word, so much for the myth about rocket science and brain surgery.

I never said what is qouted above, you did. I was referring to the investment in time,tools,training etc huessing about 40%.. Its big time money to pay workers comp, and 15% of a workers wage for Medicare and Socical security.That money has to come from somewhere..

BTW, An education can include more than classtime spent. I got a good education from reading JohnG post! Ive also recived good information sitting in a lecture hall. There is lots to learn from everyone.

No hard feelings to anyone.

    Bookmark   August 18, 2005 at 12:20AM
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I can't help wonder about some perspective on this $100 percieved ripoff. For example what % is it of your yearly living cost? That, of course is none of our business, so I'll use my own costs. Per year it is about $30K including taxes (lots of Muni's etc) and we are retired with all payed for. Plus the $30K So! [($100)/($30,000)]*100 = 0.333% of yearly living cost.

:. The $100 ripoff is in the noise level of my living expense ie not significant.

Perhaps a better indicator would be the percent that $100 is of the difference between Income and Expenses ie yearly profit (hah).

Also so far you have put in many hours writing posts, cogitating, discussing it with your buddies at work etc plus preparing the job site (jacking up the heap, getting tools out, throwing cardboard down to lay on etc), and more to come considering cleanup and putting stuff away plus telling all your buddies about it, justifying it to your wife, plus... ah the mind boggles.

Anyway you've simply GOT to figure the worth of your own personal time. To help with that in 1960 I did a detailed analysis of my times' worth and recall coming up with 12 cents/hour (California --NJ would be less). Adjusting than for the intervening 45 years and using a 4% inflation rate consistent with the consumer price index over that time period we multiply the 12 cents by (1.04) raised to the 45th and get 70 cents. (I am going to ask my wife for a raise).

Now let's see: We have the party of the first part (ripeee), heart filled with hope, naivete and misgivings, approaching the party of the second part (ripper), heart filled with greed, avarice,and malice aforethought......

    Bookmark   August 18, 2005 at 12:32PM
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I guess the easy solution to this is to buy your own parts, even if you are only SLIGHTLY knowledgeable about cars, shop around, and then tell the mechanic, especially at Tires Plus, you are not going to pay for 2.5 hours labor at $120/hr to replace a $17 ($6 at AutoZone) thermostat in a '98 Ford Ranger in FLORIDA. If that doesn't work, do what I did. Walk into the garage, ask if anyone wants to make $75 cash to replace a thermostat and then be surprised how many guys came RUNNING out of the garage to take your offer (3 to be exact).

All this crying and whining about costs of equipment, technical expertise (VVBG), $200,000 in training, etc are just feeble attempts at trying to persuade the majority that the minority has it tough. With today's equipment, technology, and interoperability the costs of maintaining a vehicle should be going down. If you can by an computer analyzer at Wal-Mart that pretty much diagnoses for you using OBD-II and it costs $325 to replace an alternator, and $400 to replace a thermostat, then someone somewhere is trying to screw you.

Yes, I said it. SCREW you. Those people who pay $400 to replace a thermostat deserve to be screwed, but those who try to do the screwing deserve to be PROSECUTED. Gone are the days when TV crews used to send cars in for bogus problems and find out which mechanics did unscrupulous work. I would say unethical, but I would imagine you have to have taken a college course in ethics to understand what unethical is. Most of these mechanics want an easy, yes EASY, job where they make a modest salary, don't really have to THINK about their work, can go home and drink/squander away their earnings, live in a dirty house, and not aspire to be anything more than a mechanic. If people actually got paid for the level of their INTELLIGENCE, i.e. physicians, professors, scientists (notice I excluded lawyers, pharmacists, and obviously mechanics), then we might actually have a better standard of living for everyone. But since people want to make the most amount of money for the least little mental effort I think we will always have mechanics, plumbers, and HVAC people.

The reason I don't own a garage is because I am smart enough to know the money is made between my ears and not with my hands. As a physician I can afford the $400 thermostat replacement on my utility truck, but I won't because that just perpetuates the problem. I will get my hands dirty, I will read up on how to replace a simple spring-actuated device, I will learn how to fix my car and I will educate others around me on how to deal with mechanics. I would much rather pay the hard-working, sweating, earnest gentleman who mows my lawn an annual bonus of $400 than pay a mechanic who is bent on making a quick buck.

There ARE income levels, there ARE castes, and there ARE people out there who will do legitimate work at legitimate prices. I have never met an honest mechanic at a corporate shop who gave me a straight answer that didn't take my words and try to turn them into a sale.

Educate yourself and the rest will fall into place.

Dr. Farrell

    Bookmark   February 21, 2008 at 2:25PM
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Sticking your nose into an old 2005 discussion. Must be a nose specialist.

sorry, couldn't resist ;)

    Bookmark   February 23, 2008 at 9:40AM
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Yeah, definitely an old discussion. I think it pretty much got torn to shreds by the rather eloquent opposition. But the real question is: how much markup is acceptable, and when should one attempt to bargain with one's mechanic for a slightly lower price when the parts are known to be more than 100% marked up?

Of course, the immediate answer to the bargaining question (as discussed above) is to simply find another mechanic who will charge a total amount which is acceptable. However, what if I have come to appreciate a particular mechanic / business to a point where I want to do business with said mech/business as opposed to supporting their competitors?

In other words - let's say I am quoted $300 for parts plus $145 for labor (about 1.5 hrs) for a repair. I do the research, and find that a typical supplier will charge $100 for the parts. If I pay the quoted price, the business gets $445 for the ----

In defense of the repair industry: I am a skilled PC (computer) technician, and have worked as such before - both employed and freelance. I, too, had to deal with the issue of mark-up. Doing freelance work, I felt bad about marking-up goods that I did nothing but diagnose the need for and order. As such, I did some research on what is fair in terms of mark-up. The conclusion I reached in the end was that 100% mark-up is typical and thus, fair. Ergo, I would judge that markup in excess of 110% is "gouging" unless some manner of extra effort was required to obtain the parts. However, for a business to be efficient, the employees don't have time to shop around. Therefore, they will most likely use their standard parts dealer, at whatever cost the dealer quotes (they don't care - the customer pays for it). So the only way to really know if mark-up is exceeding a fair amount is to contact the dealer yourself (perhaps under the guise of an employee of the shop you're a patron of ;) ). So, don't expect that your shop always gets parts at the lowest price themselves - they can get gouged as well.

And to Dr. Farrell,

I enjoyed your humorous anecdote about offering independent business to the mechanics. I know _I_ would much rather give my money directly to these people than to give the shop say, $65 an hour just to have the shop pay the mech $8 an hour - I've been on both sides of this situation before.

On the other hand, don't get all high-and-mighty because you can put "Dr." in front of your name - even sodas can do that. Agreeably, I doubt pharmacists really work all that hard. However,lawyers DO do a lot of hard work, and are doctors as well - most of them just don't get such big heads about it that they have to _title_ themselves. Furthermore, intelligence isn't measured my how much schooling one has managed to progress through - the mere cost of schooling, for one, has seen to that. That being said, there are some of us who work in certain lower-paying fields because we are, for the time being, happier here. There is a big difference between enjoying one's work and simply enjoying one's paycheck. Which is one reason which we will always have plumbers, mechanics, et al.


I, for one, fully support doing one's own work - when such action is an option, of course - but we can't each do ALL the work which could be done by others. Sure, I can learn how to fix parts in my own vehicle, or I can pay somebody else to do it for me; but paying for it doesn't make me less intelligent. In fact, this do-it-yourself fallacy of logic quickly spirals out of control. Did you mine, refine, form, etc. your own glass, metals, and plastics to use as raw materials for your truck? Did you create each part yourself from these materials, then assemble them into a functioning vehicle, etc., etc.?

In our all-too-short lives, we have to pick and choose our battles. For you, education and minor vehicle part replacement seem to be central to your enjoyment of life; but we all find value in different things, sirrah.

By the way, what does a physician need a utility truck for? I can only assume it's for "squander[ing] away [your] earnings" as mentioned earlier in the case of the half-hearted mechanic. The enlightened find drinking more rewarding than trying to out-do their neighbors in a worldly possessions contest. (Hey, I can make uneducated assumptions and generalize too, can't I?)

Knowledge does not grant education
Education does not grant intelligence
Intelligence does not grant wisdom

    Bookmark   August 11, 2008 at 11:13PM
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I recently had my 1992 BMW repaired. I fully agree that free enterprise, and the right to make a considerable profit is part of the American dream. I understand that I am paying someone to do work that I cannot do or that I do not have time to do. It's a convenience, and I have to pay for that. NOW...I DO NOT believe I should be taken advantage of in regard to car repair.

I recently had my O2 sensor replaced. The part ranges from 60-101$ I checked and called every auto parts store, sight, and dealership. The repair shop charged me 266.00 for this part (I saw the shop's delivery invoice $65.10). Robbery!!! I would have been just fine with a 100% markup (even though I think that's greedy) and paid 130.20 for the part.

What a ripoff, and this is the kind of practice that makes people distrust mechanics..

    Bookmark   April 25, 2011 at 11:09AM
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Our parts markup in the automotive, marine, plumbing, heating, electrical, cooling and refrigeration trades ranges from 0 to 2/3/4/5X.

Many businesses use a combination of parts markup, service charges, diagnostic fees, same day service fees, emergency service fees etc to hide the true cost of labor. Customers would flip if they knew they were being charged 100/200/300 dollars per hour.

We see many businesses that advertise a relatively cheap labor rate, but then milk T&M jobs, pad the bills with service charges, high parts mark-up and/or find additional problems, or try to push additional services.

We just had a heating customer that was charged $500 for a furnace combustion chamber, plus $300 labor to install it. Our cost for the combustion chamber is about $30. To add insult to injury, two other service techs told the customer her furnace was shot and had to be replaced.

    Bookmark   June 29, 2011 at 6:53AM
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Wow people you need to relax and realize where the real issue is here. Your not angry at the mechanic you are angry because you have to pay the mechanic. It is as simple as that. We are, as you real people trying to make a honest living. If you know of a dishonest mechanic, then you also know of a dishonest roofer. What do you do with the dishonest roofer. You don't use him. Do the same with the mechanic. Find a good one and pay your bill it is that simple.

The funny thing is what brought me to this post was the parts mark up only because in my MOBILE Repair Shop we do not mark the parts up the customer gets them. We use this as part of our advertising campaign to bring in customers. However the shops that do mark them up mark them up because that big brick and mortar building they need to do many jobs a mobile mechanic can not do, cost a lot of money. You have not a clue what it cost to run a shop as a mobile we can spend $8000 a month before we even turn a profit. These shops are topping way more then that.

As a mechanic it very much upsets me when I see how people take their misfortunes out on others. You are angry to have to work on your car to begin with and it is just easier to blame the mechanic then to bite the bullet and except that life deals us lemons once in a while.

However the one thing I hate more then any other thing is to see a poorly maintained car and a owner that still blames the mechanic. Listen people you can save yourself a whole lot of heart ache just by listening to your mechanic and taking your car the the shop every six months or even once a year for a check up. What about the basic maintenance, a oil change every three months. There is no such thing as lifetime oil people don't change your oil and pay big later that is all there is to it.

Many of these issues can be avoided by taking your car to the shop for a oil change every three months. The mechanic will check it over and tell you future problems you may have coming that will allow you time to save. You can call us all kinds of names and put us all down as much as you want. However in our eyes your the fool if you don't bring your car to us every 3 months. 90% of the time this is where the problem begins.

    Bookmark   July 19, 2011 at 10:49PM
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Simply put: If all mechanics charged the same price for the same part, their labor rates would be very different, and consumers would know where they're likely to get the biggest bill.

Consumers tend to assume that an alternator for their Corolla will cost the same at an independent shop as at Midas. It's what an alternator costs, right? If anything, they might ask about the labor rate, and if they're really smart, they'll ask whether the shop charges by the book (which is an easy way to rip off consumers). Mechanics know this, so they add whatever markup necessary to parts in order to maintain a "competitive" labor rate. Since the parts markup is hidden from consumers, someone who visits two shops and sees that both charge $100/hr will assume that their bill will be about the same at either place.

WRONG! The "real" labor rate involves the hidden markup, and is based on many factors, like the efficiency of the shop, location, the shop's desired profit margin, etc. Unfortunately, consumers aren't allowed to see the real labor rate because they're not told upfront what the parts markup rates are. Those are complicated anyway, so it wouldn't help the consumer very much.

If rates are higher because a shop trains its employees better than the other guys do, great! Post your techs' qualifications on the wall and in your advertisements. The expected quality of work will bring in customers. But don't be dishonest by posting an artificially low labor rate while jacking up your prices on parts.

When I go to the convenience store, I can clearly see that a gallon of milk costs more there than at the Walmart. However, I am sometimes willing to pay more for the convenience or for a higher-quality brand.

I am all for garages' profitability. But I would also like to know what I'm getting into when I visit a shop. It would be a much better system if part prices didn't fluctuate wildly, and posted labor rates truly reflected a shop's costs. I would gladly pay more in labor to keep parts prices from being hidden from me. And I think most consumers would agree. Shops that are overstaffed or otherwise bungle costs would likely tend to disagree with me.

    Bookmark   October 28, 2011 at 11:34AM
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This has been quite a thread, and we can see that in different parts of the country, things are different.

Here's how my mechanic's shop works here in Vermont.

ALL his mechanics must be ASE certified. And he pays for the schooling as necessary. And he pays them, (GASP!) a LIVING WAGE so they can support their families! His shop gets $68 an hour.

By the way, a good auto tech at a dealership can make over $50,000 a year. Their jobs won't ever be outsourced. And since all mechanics must have their own tools, each guy/gal has over $3,000 of their own money invested in that rollaway tool box. The days of the "grease monkey" are long gone.

Parts: As the Original poster noted, he can get his parts from RockAuto. Yeah, if he wants to wait up to a week for delivery. And they are very close to wholesale simply because of volume.

So my guy gets his parts from the LOCAL parts house. (Keeps more LOCALS working!) NAPA, CarQuest, etc. But he gets a discount. Usually about 30-40%. He charges ME the retail price. And if I were to go into those same stores, that's the price I would pay.

Do I like my mecchanic(s)? You bet! His guys have kept my 2003 Expedition going for 200,000 miles.

    Bookmark   July 10, 2012 at 7:23AM
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