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People ask me all the time how the price of an auto repair is determined, usually phrased something like, "Why does my car repair cost so much?" This is a question worth asking, especially if you've been given a repair quote that runs into the hundreds or even thousands of dollars.

There are three main criteria used in pricing any given auto repair. The first is the labor rate, or what the shop charges for the time and expertise that goes into repairing your vehicle. The second is for the parts themselves, and whatever other shop support materials are used in the process of the repair. The third area to consider are the fixed costs or overhead that the repair shop has to cover, but that doesn't get reflected on your bill.

Understanding Labor Charges

When you see a line item for "labor" on your repair estimate or bill, there are two factors that go into it. The first is the shop's own per-hour labor rate. The second is "book time."

A shop's labor rate is the hourly rate it charges for work. The term "book time" refers to the average amount of time it takes to perform a particular automotive repair or maintenance job. This is a number that's set based on how long it takes a factory mechanic (or "technician," as is the common industry parlance) to do the job, but with a modifier applied in order to establish a more realistic time that a less trained technician might take. It's the automotive tech's responsibility to complete the job within that "book time" window, though sometimes repairs take longer or can be performed quicker.
Repair Estimator

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

A shop that specializes in a particular area usually charges higher labor rates for their service than a general service shop. While a specialist may charge more, this type of shop can often wind up being cheaper in the long run. A specialist is more likely to diagnose and repair a problem in laser-like fashion, fixing the vehicle in less time and using fewer new parts. Shops unfamiliar with a type of problem can end up muddling around, wasting the customer's money on unnecessary parts and long hours of labor just trying to find a solution.

Parts And Supplies

Yes, auto repair shops mark up the price of parts. These guys have to make a profit to stay in business, so typically they will tack on about 30 percent. Keep in mind that this markup also means that reputable shops can provide a warranty for their repairs.

The type of parts used for auto repair directly affects the bottom-line price. Original Equipment Manufacturer (OEM) parts tend to be the highest priced, followed by aftermarket parts. There are typically two to three tiers of aftermarket parts. Different tiers are defined by quality. I use the top of the line aftermarket parts to raise the chance of a longer lasting, effective auto repair.

Finally, used parts also vary in price depending on the mileage and/or demand of the part. A used part can render an effective repair, depending on its condition.

"Shop support" can be defined as any products or services used to complete the repair. During the course of any auto repair certain stuff gets used, supplies like brake cleaning solution, shop rags, and replacement fluids. There are other ancillary services that you might encounter, like recycling and disposal fees for oil and other fluids. Costs of this nature are often passed onto the consumer.

Keeping The Lights On

What's not often passed onto the consumer are the costs of running a shop, which in this modern age, can be pricy. Regardless of size, a shop has expenses that have to be paid by the work generated. There are the obvious ones, like the rent, electricity, heat and other utilites.

But there are also substantial costs for equipment and technology. In order to work on today's cars a shop must have state-of-the-art scanners, diagnostic software, and lab scopes to analyze vehicular datastreams in an effort to extract critical information for accurate vehicle repair. Without such info, techs cannot deliver accurate repairs. Other equipment such as vehicle lifts, floor jacks, lubrication equipment and the likes are necessary to operate a shop efficiently and effectively.

Good trained service personnel costs money, period. Usually techs are classified as "A", "B", or "C" techs, and the more high-grade techs in a shop, the more it costs to pay them. In order to attract a high-grade technician these days, shops have to pay a good hourly rate or weekly salary. In addition, health insurance and other benefits such as a company car often go into the package to attract the class "A" technician.

These technicians have to go to school on a regular basis to keep up with new automotive technology. Without this training, techs cannot repair vehicles in the "book time" allotted for a particular service operation. (Not to mention the occasional "headache" job that comes along that every tech in town has had his/her hands on without success.) A repair shop usually pays for this training.

Many shops carry their own parts inventory. Given the number of different years, makes, and models of vehicles on the road, this inventory must be broad. Sitting on this inventory is not cheap.

As you can see, there's a lot more that goes into auto repair pricing than parts and labor.

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    • 1 Second Ago
      • 3 Years Ago
      The markup on parts prices dosn't help, I had a coil pack replaced on my truck they charged me $80.00, I found out his cost $40.00. They tell you you can't do it yourself , well the one I had replaced by a Mechanic cost me $250.00, and he didn't change the Spark Plug, I just changed 2 myself plugs included cost me $110.00 Total savings $390.00 and it only took 30 minutes to do.
      • 3 Years Ago
      When I was 18 and had a car I needed a repair on the water pump. I paid and it hurt so now that I am 55 years old and never used another mechanic. I only buy cars that I can get a oem shop manual for. Now on DVD its great if your book smart. I purchased a 1984 corvette to play with, I had the engine out a few days later training my some to repair cars. I told him that never repair other peoples cars. That is not what I am teaching you. I never repair or tell others what to do to repair there cars. There are many cars I will not own because parts are high or require to many special tools. I tend to stick with Ford, Chevrolet and Honda. Never touch a Chrysler because it will always continue to fall apart as they have for 30 years. This also includes Jeep as I did that one in 2008 as parts fell off it going down the road. You drive what you want and fix what you can. The best prevention in car repair is maintenance, If you do it like it says, It will last for well over 200,000 miles. I had a Ford Pickup with 435,000 miles on it. Air Conditioning can be totally replaced for less that $300 if you do it yourself or pay a shop $1200, I have had 40 or 50 cars in 30 years and never used a shop and my son now is doing the same.
        • 3 Years Ago
        40 or 50 cars in 30 years? Thats a different car about every 8 months. How does that make you an authority on maintaining a vehicle. You are the guy that makes everybody stupid in this area. Buck up, go to the dealer, and pay good money to keep your car runing the right way.. How would you feel if you worked in a furniture factory, and everyone else decided to build their own furniture?
      • 4 Years Ago
      all these point are vvrong and outdated. I vvork in a dealership and the main reason vvhy estimates are so high,is because the mechanics vvork on commision only(the bigger the fraud the more money they make.so do the front desk clerks vvho give the customers(patients)the horrific nevvs. Its fraud!!!
      • 4 Years Ago
      buy a nissan, you wont have that problem, george in louisville, ky
      • 4 Years Ago
      You forgot to add GREED into the equation! Parts are marked up several hundred percent and labor rates are a scam.
      • 4 Years Ago
      Please convince me why a registered nurse gets $30 per hour and a mechanic(for even a pool guy) can charge $75 or more.
        • 4 Years Ago
        whoa...... are you comparing a W2 job to a 1099/business??? How much is the HOSPITAL charging? that is what you should be comparing it to, we are in the IT (computer/Electronics) field, and charge $75 - $125/hr for onsite and $50 - $70/hr bench. Now my techs and engineers get paid based on experience etc... ranging from $10.50 - 34.00/hr... BUT the rest goes to things like: 20% = Taxes 5% to payroll taxes 20% to Lease payments 15% to Fuel 8% to Maint. 4% to Credit Card Fees 20% to salary (employee) 8% profit. (above numbers are approximate and very by the week) You CANNOT compare a business to a personal, that $30/hr is with the majority of taxes being paid and is STRAIGHT profit, unlike where $100/hr totals $8 in profit. NOT to mention things like benefits etc.... I am SHOCKED by the public's mis-conception of business!!
      • 4 Years Ago
      WOW... Most of you people leaving comments really have no idea... really.... I can tell the majority of you ARENT mechanics, but rather the "Backyard mechanic" which gives EVERY REAL MECHANIC a BAD REP.... To be a mechanic, you ave ALOT of schooling to go thru, about engines, transmissions, and electrical. Then, you have to understand how an engine works, which Obviously Most of you dont..... with comments like "fix it your self" and "buy the tools and fix it your self" and bitching about "labor costs, and Flat Rate"..... What the majority of you dont seem to understand, is The REAL MECHANICS spend ALOT of money on tools, education, and the understanding of the never ending new technology commimng out on our cars. Which is why now days, shops charge ********* because theres a TON of computerized **** in the cars that need programming... anymore you almost need to be a computer programmer to work on these damn cars.... so QUIT BITCHING ABOUT PAYING SO MUCH TO YOUR MECHANIC... HE/SHE KEEPS YOUR SCREW UPS AND MISHAPS IN CHECK... MAKES IT SO YOU CAN DRIVE YOUR CAR.
      • 4 Years Ago
      • 4 Years Ago
      Trader1221 I dont know where you got your money info,as it is apparent that you dont have a clue what your talking about. I have been working on autos for 25 years.I just made my first 50G last year.I'm an ASE master tech and I deserve every GD cent that I make.Maybe if you study hard and put some effort into a career you might make decent living so you can stop complaining about other honest hard working people.
      • 4 Years Ago
      I know people who will pay someone to put air in their tire. How lazy can you get.
      • 4 Years Ago
      I have a friend who owns a small auto repair facility in south central NY State. His shop is a total of 4 bays..2 mechanical and 2 body shop. His yearly property tax on this business is 22000.00...yes you are reading that right. Now add insurance, workman's comp, business fees etc...and you wonder why things are so expensive. The greed isn't the business owners it's the darn state.
      • 4 Years Ago
      Car repairs cost so much because of all the crap manufacturers are putting in them. Remember the k.i.s.s. rule. KEEP IT SIMPLE STUPID!
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