Pricing
Let's talk about prices in our industry. I will refer to the industry as “we." Most shops have an hourly rate and use one of the published labor guides. This is a book or compact disc we use to help establish a labor time to perform a service. This does not take into consideration age/mileage or the affects it has, modifications or damage that could create problems adding to the labor cost. Conversely it may not account for a new tool that helps to perform a service more quickly, therefore; saving us time and you money. You still think it is easy to come up with a price, it’s not that simple. Most shops use several different parts suppliers that carry new and reconditioned parts. This can be confusing when you start to call around looking for prices. Take a water pump service. Just the difference in the cost of a new water pump vs. a reconditioned (often called “remaned” for remanufactured) pump can be huge. Then the book time may be over-inflated or under-inflated which could cause a fluctuation in pricing from shop to shop.
Let us take a real world scenario. You call a shop for a price on a water pump for a 1998 Honda Accord. There are 3 different engine possibilities depending on the trim level. Some of us don’t know if we have the four or six cylinder let alone if the four cylinder is the Vtec design (this could make a difference in some repairs). Assuming it'the four cylinder and there is no difference in parts or labor between the Vtec/non-Vtec, the shop goes to work on pricing. They call their suppliers for pricing and have a choice of aftermarket, new or remaned or dealer supplied new, original equipment (oe). Aftermarket in this situation means a company other than the original supplier. The aftermarket remaned pump is about $35.00 and the aftermarket new pump is about $80.00, if going to a local quality parts supplier (like Car Quest, Napa, etc.). The dealer part is about $65.00 before any additional mark up. Most shops (like any business) have systems that calculate mark up from cost. Dealers typically do not give shops much of a break on parts, therefore the mark-up on a part acquired from the dealer can be much more than they charge, depending on the shop’s system and mark up. So, the shop looks up labor and finds that it has a time of 4.6 hours (assuming it has a/c). So, you call a Honda dealer and a tire store located not too far from us. The dealer tells you the price is $581.80, the local tire store tells you the price for the remaned pump is $446.00, then you call us. If you have had that vehicle in our shop previously and we confirmed the leak we will price it. If you have never been in to see us, or we have not inspected to verify the pump is faulty we will normally ask you several questions and urge you to have it inspected, then we can price it. Now, the final part of this scenario is; the belts, timing covers and timing belt(s) have to be removed in order to replace the water pump. If the belts are old, or you find other problems, it is in your best interest (saves lots of money on labor) to take care of these at the same time the water pump is installed. So we tell you a range of $600.00-800.00 depending on what is found. If the other shops did not ask the right questions or warn you about belts, timing belts, seals, etc., you think we are crazy and overpriced. You have to compare apples to apples. Again, not as easy as it sounds or would appear.
Our recommendation is to interview a shop the same you would when using any service industry. Find a shop that is qualified to handle your needs and backs up their work with a good warranty. Once you find a shop you trust, then stick with them; like doctors, plumbers, etc. Price is dependant on what is found during the actual service, not what is quoted over the phone. We have all felt like we were sucker-punched when lured into a retailer, or using a service, with the promises of the lowest prices in town, then found out differently after it was all said and done.
