The dealership’s voice: labor costs depend on the repair of the car

When pricing labor costs for vehicle repairs, the two most common methods used are normal time and fixed time. Customers often wonder what is the difference between the two?

Labor charges are based on the actual time the technician spent working on your vehicle.

Flat labor charges are based on the average time it would take a technician to complete a particular job, regardless of how long it actually takes to complete the job. The time charged to the customer is based on similar work performed by other technicians, and these times are documented by an independent third party and recorded in a manual, which is purchased by the dealers. There are a few companies that sell them.

It may leave you wondering: which one is better? The answer is, it depends on the repair.

For routine and repetitive repairs a flat rate is used and that’s better (i.e. an oil change). Our dealer charges 0.3 hour labor for an oil change. If we were to charge for the service based on real time, the charges might be lower or higher, as each technician would take a different time to complete this work. A technician’s work experience, investment in tools, and work habits all have an impact on how fast or slow a job is.

If you want a common price for a particular job, you should use the flat-rate, time-based pricing model, to equalize the differences in the time to complete each technician’s job.

For diagnostic work and complex repairs, normal time is most often used, as no specified labor repair time can be reasonably attributed to diagnosing these issues. Each task / solution is unique and different, and a fair lump sum time is almost impossible to define.

Direct repairs usually involve engine noises, electrical system issues, or drivability issues, which are not easily diagnosed. They may take an hour or more of diagnostic work time and even longer to repair.

All repair shops are required by law to provide accurate estimates within 10% of the final price, and customers must authorize any work (or repairs / additional costs) before that work is performed. A service advisor or technician will explain to the customer why the extra work needs to be done and how much it will cost.

New car dealers promote common dedicated service programs at a flat rate that cover a wide range of maintenance and light repair items such as oil changes and brake pad replacement, which are very competitive in terms of price. Most dealers have a very wide assortment of brand name tires (all season and winter) and match competitor prices, and many even offer tire storage services.

The dealer will have a large assortment of “special tools” that are brand specific and customized to facilitate certain repairs. These tools are shared by all technicians in the dealership.

Most technicians have the rest of the tools they need. Technicians may have $ 50,000 or more invested in their tools; they make that investment to make sure they have what they need to get the job done right the first time and in the least amount of time.

All the dealerships offer over-the-counter parts for DIY enthusiasts, and some offer designer clothing / apparel, accessories, collectibles, freebies, and gift cards. The dealership is a great place to get something for that special someone.

Your choice must therefore be clear: you are buying your new vehicle from a new car dealer. Of course, you should also service your vehicle there.


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Sylvia F. Hernandez