As the economy continues to slump, and as more consumers are foregoing the purchase of new cars and hanging on to their old ones, the cost of auto repairs is becoming a hotter topic than ever.
Even before the current economic crisis, the conventional wisdom (for whatever that's worth) was that repairs were less costly at independent repair shops than at dealerships.
Countering that truism was the claim, from new-car dealerships, that their technicians had more sophisticated training and that the quality of work was higher. The verbal jousting on this topic has been going on for years.
But a recent, first-of-its-kind study by the Automotive Aftermarket Industry Association (AAIA) would seem to back up the truism that costs are indeed lower at those "indie" shops. The AAIA is a trade association representing companies that manufacture and distribute aftermarket parts, accessories, chemicals and supplies, as well as independent repair shops.
According to the AAIA study, repairs cost an average of 34 percent more at new car dealerships compared to the independent dealers, for a total "extra" cost of $11.7 billion a year.
The study was conducted during November and December of 2008 and was based on 840 telephone interviews with both new-car dealerships and independent repair shops in six major cities -- Boston, Newark, Atlanta, St. Louis, Los Angeles and Seattle. Foreign and domestic nameplates were considered separately.
Interviewers asked the dealers and repair shops what parts and labor prices they charged for 10 different types of repairs.
In the six cities where surveys were conducted, the cost of vehicle repairs ranged from 19.7 percent more to 46.8 percent more at new car dealerships, compared to independent repair shops.
Here is how those average cost differences broke down, from city to city (See table, below right):
How Much More Is A Dealer Than An Independent Shop?
Source: Automotive Aftermarket Industry Association Study, 2009. The above cities were the six chosen for the study.
The study reported some significant differences in the costs of parts and labor between domestic and import vehicle nameplates.
According the survey, foreign-nameplate repairs performed at dealers averaged 36.8 percent more than at independent repair shops, while repairs performed on domestic nameplates averaged 31.5 percent more at dealerships than at independent repair shops.
The widest gap for a specific repair reported by the study was the average cost of replacing an entire radiator (not just the core) on a foreign nameplate vehicle, including parts and labor. The cost of that job, in the survey, was $325.99 higher at a dealer than at an independent shop.
Meanwhile, the cost of buying and installing front brake pads on a foreign nameplate vehicle was $138.92 more at a dealer than at an independent shop, according to the survey.
At the low end was a $21.95 cost differential for replacing drive belts. Other repairs / replacements surveyed included a rebuilt alternator, new electric fuel pump, transmission flush and filter replacement, upper ball joints, new air compressor and rebuilt starter.
Questioners inquired about repairs to, and part-replacement costs for, such vehicles as 1998 Lexus Coupe, 1998 Dodge Neon, 2004 Toyota Camry, 2004 Mercury Sable GS Sedan, 2002 Volkswagen Jetta GL, 2002 Chrysler Sebring LX sedan, 1997 Honda Accord EX sedan and 1998 Chevy Blazer S-10.
See the below chart for a more detailed list of common repairs and the corresponding costs.
For Average Repairs, Independent Shops Prove Cheaper In Study
|Average Cost Difference Per Job||New Car Dealerships||Independent Repair Shops||Average Difference||Difference as % of Independent|
|Air Compressors - New||$932.98||$812.40||$120.58||14.8%|
|Alternators - Rebuilt||$372.05||$272.08||$99.97||36.7%|
|Electric Fuel Pumps - New||$829.18||$681.93||$147.25||21.6%|
|Front Brake Pads & Rotors||$487.06||$346.80||$140.26||40.4%|
|Starters - Rebuilt||$412.01||$291.17||$120.84||41.5%|
|Transmission Flush, Filter & Refill||$182.14||$144.88||$37.26||25.7%|
|Upper Ball Joints||$660.04||$488.59||$171.45||35.1%|
|Water Pumps - New||$431.89||$287.06||$144.83||50.5%|
Source: Automotive Aftermarket Industry Association Study, 2009. The prices for New Car Dealerships and Independent Repair Shops for each job were calculated by weighting prices within each of the major markets and then weighting those calculations by domestic and foreign vehicles.
Rich White, AAIA's Sr. vice president for marketing & communications, opined that one reason dealers generally charge more for repairs is because "they have a lot more overhead than independent repair shops have -- they have more buildings, and more things to pay for."
Meanwhile, Charles Cyrill, the director of public relations for the National Automobile Dealers Association -- the trade group representing new-car dealers -- noted that "the good news is that consumers have choices when it comes to auto repairs. And today's vehicles are becoming increasingly complex," from a technological standpoint.
"New-car dealers offer the best-trained technicians in repairing specific brands of cars and trucks," said Cyrill. "New car dealers invest heavily in training, service equipment and diagnostic tools. Service technicians at new car dealerships routinely undergo high-level training exercises to repair today's complex vehicles and must be certified by the automaker to perform repairs."
White of the AAIA said that technicians at independent shops are also "highly-trained, certified and use sophisticated diagnostic equipment, and also have a great deal of expertise.
"Independent shops also represent 70 percent of all of the non-warranty service and repair work conducted in the U.S," said White. "Dealers are obviously involved [in] many other things, like, specifically, selling and leasing new cars and handling financing -- so they don't have as much time and space to devote to repairs, compared to independent shops," he said.
"Dealers couldn't handle all of the repair work that American consumers need to have done to their vehicles."
Although, that 70 / 30 percent ratio could be changing soon, pondered White. "With new-car sales being down like they are, due to the economy, I think dealers are finding that the service department is going to make them a lot more money than new-car sales."
Generally, that has actually been the case for a long time, given that dealers' profit margins on new-vehicle sales are so slim, but White expects that dealers will be taking on more repair work in the months ahead.
NADA's Cyrill also remarked that "new-car dealerships also receive daily updated service bulletins when vehicle 'fixes' are discovered, and independent repair shops do not have the benefit of service bulletins or OEM training certification.
"Generally, there is a cost discrepancy when a consumer chooses a genuine factory OEM part compared to an aftermarket part," Cyrill continued. "Consumers must determine the 'true cost' of a repair when choosing a new car dealership or an independent repair shop. What may seem cheaper at first may not be at all if a faulty or an inferior part causes a repair failure."
AAIA's White disagreed with that suggestion, saying that the "quality of the parts and the quality of the work done at independent shops is equal to the quality of parts and work performed at dealerships."
But White and Cyrill do agree on one thing -- that, if you're hanging on to your old car because you're hesitant about buying a new one in this economy, the old saw about the importance of regular maintenance is the key.
"That's definitely the 'secret' to your vehicle's longevity," stresses White. "With the economy the way it is, and people worried about losing their jobs, it's more important than ever to make sure you get your car checked regularly, and attend to problems when they arise. Because if you don't, they'll only cost more to fix later."
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