Niagara Gazette

Features

August 15, 2013

TOM'S CORNER: Determining the price of auto repair

Niagara Gazette — People ask me all the time how the price of auto repair is determined? This is a good question. There are three main criteria used in pricing any given auto repair. They are labor, parts, and shop support.

LABOR RATE

A shop’s labor rate is the hourly rate at which the shop charges for work. The two determining factors of the cost of auto repair labor are “Book Time” and the shop’s per hour labor rate as compared to other local shops’ rates.

The term “Book Time” refers to the average amount of time it takes to perform a particular automotive repair or maintenance job as defined by the labor flat rate guide used by the automotive industry. The tech’s responsibility is to complete the job in that time. The guide’s average times are determined by what it takes a factory tech to do the job. Then an equation is applied to the factory time in order to establish the general time for the auto repair.

Shop labor rates vary with the geographic area of the country and are competitive within a particular area. Labor rates typically run $80 to $150 per hour nationwide.

LABOR PRICING MATRIX

Say, for instance, a shop offers you a price for a job that takes two hours. When you break down the costs, you find a major discrepancy in the labor price. You divide the shop’s labor charge by two (because the shop told you the labor would be no more than two hours) yet simple division of the labor charge indicates that the hourly labor rate comes in at 1½ times higher than what was quoted. Ask about this because it is an unfair practice that some shops use to boost their labor income. The service advisor may give you a story about shop costs, etc. Don’t accept it and find another shop that uses a calculator correctly. The shop that uses what is called a labor matrix-pricing guide for labor is gouging you unjustifiably.

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