Understanding Car Repair Prices

Car repair can be pricey, and sometimes quite surprising. Most of us who have been to a repair shop know how true this can be, but why are the prices so high, and what should you be paying?

Car repair shops work on a commission/flat rate system and charge for each job based on the hours that the book says the specific job should take. Along with shop supply fees, waste fees, recycling fees, storage fees, and taxes, things can add up in cost pretty quickly.

If a power steering pump says it takes 6.9HRS to replace, and the shop charges $159/hr, then you are looking at almost $1100 for just the labor, not including parts and all the other fees I listed above. With modern repair prices climbing so steep it is not a surprise that more people are attempting to perform their own repairs.

Labor rate fluctuations:

There is a pretty wide gap in prices between different shops. I’ve seen them range from $70/hr at small mom and pop shops all the way up to $219/hr at dealerships. The price changes based on overhead and expense, as well as location and demand. It is always advisable to call around and get a few quotes before agreeing to a price anywhere.

From what I have done locally, I am usually able to save my clients about 45% of what most shops charge. So be sure you look around because people like me are out here to actually help out.

Technician pay fluctuates based on a lot of different things such as training, certifications, tools, etc. Highly trained technicians are a very valuable asset and are getting harder to come by, and the industry does not offer many incentives for new technicians. In most shops nowadays, techs are lucky to get about 20-25% of the labor rate. It used to be about 40%.

Dealerships:

The service/repair department keeps most dealerships alive and running, so they use the money made from high labor rates to evenly distribute amongst the dealership’s different departments and keep everyone balanced.

The system is faulted at this point, seeing as dealerships keep raising their rates, but they are not paying the technician anymore, even though at the core the technicians are the ones who keep the operation afloat, and I am starting to see this become a big issue amongst a lot of the next generation of service technicians.

Independent repair shops:

Independent shops usually run a little bit differently. They have a lot less staff/overhead since they are only there to focus on service and not car sales as well. They are not required to stay up to date on manufacturer requirements and certifications so that is a huge expense that is gone. The service departments are also usually easier/cheaper to maintain, so it leaves a lot of room to have lower labor rates.

Back when I moved to Colorado I bounced around to a lot of different shops until I found somewhere that I was compatible with, and I have to say through experience the independent shops have always shown me the shadier side of the industry. Huge corners were cut, and parts/supplies were purposely mislabeled and sold for 100-200% profits. I’m not saying by any means that there aren’t any reputable independent shops out there, we just have to be careful and do the proper research before paying anyone for their services, that also includes dealerships, just because they represent a brand does not mean they always uphold the integrity of it.

Mobile Repair Technicians:

Mobile technicians are a somewhat new and convenient alternative to taking your vehicle to a repair shop. The majority of the work that I personally do now is mobile, and at my client’s preferred location. In doing so, I can cut the overhead expenses that I would have in a conventional shop, and I can pass the savings along to my clients through a lower labor rate than a shop can provide. Doing this makes me more money, and saves my clients money, it is a win-win situation when done correctly.

One caution I will put along with mobile repair is to make sure you look into the technician/company that you hire. People will advertise very cheap repairs, and sometimes you get what you pay for with this. I have heard a lot of horror stories of mechanics hired through Facebook or Craigslist who come and cause more damage to the vehicle and then just take the money and run. So be sure you find someone who is licensed with the state and can provide you with referrals.

Being prepared for costly repairs: 

Always do your best to keep up with your vehicle’s maintenance, doing so will help you avoid other more costly repairs down the road.  Make sure to have an emergency fund that is there in case of an expensive car repair, or blown out tire, etc. You always want to be prepared and stay ahead of the game.

“Things can go wrong and happen fast, so we want to be sure we are able to respond back to a crisis just as fast as it approached us.”

Deals can always be found online, and you can call around and get quotes/comparisons, and if worst comes to worst and you cannot make up your mind then send me an email with links of the shops in question and I will do a little detective work online and let you know what I think 🙂