Yeah, the parts got from the wholesaler to the dealer by themselves. You didn't get a bill from the office worker who paid for those parts or the cashier who took your money, or the guys who clean the heating system in the shop every year, or the parts department guys who ordered the parts, or the person who made a special trip across town to deliver them, or the service adviser who listened to your description of the problem and entered it into the computer. They all work for free.
We don't grump when your kids sell us lemonade from their stand and charge us twice what we could have bought it for at the grocery store. Why does a steak cost more at a restaurant than in the grocery store? What do you think would be a fair markup? Have you ever run a retail business? If not, ... If you're a public employee like I was, you will have no idea what ridiculous costs, taxes, government regulations, and insurances are involved before they even think about paying wages and making a little profit.
All sarcasm aside, it looks to me like they were REAL good to you. There are always different grades of parts with different warranties and different costs. You're comparing the wholesale and retail cost of those parts. You'd really be shocked if you knew how much NAPA paid for those parts but you're not mad at them. When Walmart or any other retailer sells me a $30.00 pair of shoes on closeout for $7.00, they are not losing money. Now THAT'S a markup, and their regular price still beats those of other stores.
To give you a better answer, most shops use a "flat rate guide" that spells out how long each job should take. That way they all charge the same times as their competitors which are fair to you and the mechanic. The only variable is their hourly labor rate. There are two ways customers can unfairly think they were overcharged. One simple explanation is many shops put two mechanics on one car so it gets done in half the time. You only notice that when you're sitting in the waiting room for your car. The other is the reason flat rate is popular. Lets use $100.00 per hour for an example. Searching for the source of the leak won't be in the flat rate guide because every car will be different. The mechanic punches a time clock when he starts on your car. Then he has to run into the parking lot to find it, drive it into the shop, set the arms of the hoist, get the car in the air safely, wash the area, then look for the source. He might have to pressurize the system, then look some more. Everything he does to your car and everything he finds has to be documented in writing on the back of the repair order. (Now many of them type it into a computer at their work station). What you think takes a few seconds he got done real fast in about 15 minutes. Sounds like he wasn't wasting any of your time and money. Next he has to run to the parts department, tell them which parts to look up, and call around for the best deal, ( price vs, warranty, vs. Availability right now, vs. How soon can someone get it here). He needs to supply that information to the service adviser so that person can calculate an estimate of the total cost of repairs. THEN he can "punch off" the job meaning punching the time clock to show he stopped working on your car so you don't keep on getting charged. It is almost impossible to do all of that in.4 hour. $40.00 for that implies their hourly rate is considerably less than $100.00 per hour, but to continue with my example, once you okay the repairs, the mechanic punches back on your job ticket, gets the parts that have arrived by now, and begins replacing them. NOW is when flat rate comes into play.
To make the math easy on my head, lets say the book says it should take one hour to replace the thermostat and the shop charges $64.00 per hour. You are going to be charged $64.00 for that procedure regardless how long it actually takes. And lets say that mechanic is paid $20.00 per hour. He is going to have $20.00 added to his paycheck regardless how long he takes. If he takes all day on that one procedure, you aren't going to be charged any more but he can't move on to other jobs either. He loses; you don't lose. On the other hand, if he is very experienced, has a lot of advanced training, or has invested heavily in very expensive special tools, he is going to get the job done faster. He still gets 20 bucks, you still pay 64 bucks, but he can move on to another job sooner. That is how good mechanics can earn 10 - 15 hours of pay in an 8-hour day, but that is not ripping the customer off. It's in the mechanic's best interest to be productive at all times and work quickly, but the checks and balances is that if he makes a mistake, he has to do the job over, ... For free. You will not be charged a second time for the same repair. A barber is another example. They charge a set price for a haircut. They don't measure the length of your hair before and after or bill you according to how long you sit in the chair. If they work more efficiently they can do more haircuts in a day so they make more money. They are using their version of flat rate but we don't begrudge them for it.
In the case of defective new parts, which happens more than we like to think about, the mechanic still has to do the job over and you won't be charged again, but since it's not the mechanic's fault, he deserves to be paid the second time. Guess where the dollars come from to cover that? Parts markup. No one else works for free and he shouldn't have to either.
As a former suspension and alignment specialist at a very nice family-owned Chrysler dealership, I worked slower and more carefully on the adjustments, all of which can be "close enough" or more precise, depending the mechanic's conscience, and everyone knew I was paid 1.3 hours to align a car and it usually took me over an hour and a half, ... But, they worked around that as far as scheduling, and the bosses appreciated it because I rarely had a comeback, (followup complaint or concern). I had a lot of happy customers. The smaller paycheck was offset by less stress and a reputation of providing quality service. That was fine for me but the shop lost money too. Also, there are a lot of people who get very angry if their car is finished 15 minutes later than planned. Their time is more important than the cost of repairs.
To add to the confusion, the odd dollar amounts suggests they almost surely did use the flat rate system. Every procedure is listed individually, like you did, but the mechanic doesn't have to constantly run back and forth to the time clock. He does all the jobs, then punches off. Part of the cooling system flush involves draining the old coolant. That's like watching paint dry. You aren't too productive doing either one so he will start taking something else apart while waiting for the system to drain. Because he's doing multiple things at the same time, if he's efficient he will be getting done sooner than expected, especially when there are a lot of different but related procedures being done. Dentists work the same way. They have a charge for a root canal, another one for teeth cleaning and exam, but it takes less time to do both at once on one person than to do them on two different people.
That is one place where a service adviser can be dishonest with flat rate. To give another example, suppose the book lists your water pump at two hours. It may also list the water pump pipe at two hours because most of the same things have to be taken apart. That would imply you should be charged four hours, but very often there will be an entry at the bottom of the page that says, (in addition to the two hours for the water pump), "ADD.6 hours for the pipe". That means they expect the job to take less time when two jobs are directly related AND they are done at the same time. That would equate to the dentist charging less for an exam because it was part of that root canal. You should be billed for 2.6 hours instead of 4.0 hours. Those hours used to have to be typed into the computer and they could be adjusted when necessary. Now they typically enter a code number for the procedure and the computer looks up the labor times and enters them.
This problem can work the other way too. Often they fail to catch everything that is supposed to be included in the calculation. Some of my fellow mechanics were complaining that they weren't getting paid what they were expecting so the manager set out our own flat rate guide to let us look up our own times. We found just as many undercharges as overcharges which were the fault of the service advisers. Almost all of them were honest mistakes but you should hear some of the mechanics squeal when it affects their paycheck. Sometimes the service adviser had a reason for not including part of a procedure in the calculation, but of the repair orders I checked, I rarely found a mistake. It's similar to ordering food at a fast food joint. You know in advance what each item costs, but you can buy a "value meal" with the same items at a lower price when combined.
Another thing that is real frustrating to mechanics and service advisers is when additional parts or services are found to be needed after the initial inspection, after you were given the estimate, and after the repairs are started. My service adviser hated calling customers with revised estimates the first time, and he really hated doing it a second time so he would intentionally not include some of those things on the final bill, ... And he had the blessings of the dealership owners to use his discretion. It was more common to do that for regular customers, especially those who brought us cookies and donuts on occasion! It wasn't the mechanics fault that worn or defective parts weren't obvious at first, and it wasn't the customer's fault that no one knew, so there were a lot of little things we gave away every day.
You'll notice I didn't mention anything about the individual costs that you listed. That's because there's way too many variables, and I have no way of looking up labor times. I can share that when I left the dealership in '99 we were charging $60.00 per hour and I was shocked to learn the local Goodyear dealer was charging $75.00 per hour. One of the lowest independent shops was at $58.00 per hour. While teaching years later I put a list together of all the expenses I could think of that repair shops have to pay but don't charge for, and came to the conclusion that I don't understand how they can afford to stay in business today when they only charge $100.00 per hour. The list included over 60 things. In addition, we had 49 employees at each of four dealerships, (needed a lot more, but a whole new set of government regulations went into affect once we had 50 people, so those not hired were out of luck), and not counting the sales people, 11 mechanics and 8 people in the body shop had to bring in enough dollars to pay everyone else's wages. That's why there's such a huge gap between the mechanics' pay and the shop's hourly rate. Over half of the employees don't generate any income for the business but they still are needed and they do kind of appreciate a paycheck.
Sorry for taking you in so many different directions. I will never defend a dishonest shop or mechanic, and I too do not like big repair bills, but from what you've listed, I don't see a glaring reason to be upset. What angers me is when three or four specific manufacturers, (one is one of our "Big Three"), intentionally design in things they know will cost their owners money later. It's one way to try be profitable in the short term, but then they run out of repeat customers years later. Then the government takes them over and they start with a new round of tricks to get new, unsuspecting people in the door. You should know that according to one very high-level national trainer, Chrysler is in the top three world-wide for being customer-friendly.
SPONSORED LINKS
Friday, October 19th, 2012 AT 1:27 AM
