If you own a car at some point you’ve complained about the high car repair cost. Most people do, even mechanics. So why car repairs cost so much? There are so many factors, it would be hard to cover all of them. However, the main factors in car repair cost are the cost of parts, and labor, plus all the factors that go into those.
Cost of parts
It’s no secret car parts aren’t cheap. Much of why car repairs cost so much is the cost of parts. Sure there are ways to save money on parts. Buying parts from places like RockAuto will save you money, however, you get the quality you pay for. Plus buying parts for yourself only works if you do the work yourself.
When a shop gives you a price on the parts expect them to mark the cost of those parts up. It’s the only way they can stay in business. They can’t make enough money to stay open on service dollars alone.
How much they mark up parts is different depending on the shop. Some shops have a standard percentage markup. Which is great if you only need cheaper parts replaced. However, when you start looking and things like whole engines, and transmissions. A standard 25-35% markup makes a $4000 engine cost $5000 or better.
That’s why other shops have a sliding markup. Where cheaper parts may have a huge 75% markup while expensive parts may only have a 2% markup. This is why a shop may charge you $9 for a $2 bulb.
One last thing to remember. Parts stores sell parts to repair shops, but they don’t always give them a discount on the cost of parts. So when a shop says they are getting parts from say Advanced Auto, and you call on the cost of parts. Don’t get mad at the shop when they charge you more than what you can buy it from the parts store. They may be paying the same amount to Advanced Auto as you would. Yet they have to make some money on parts to stay in business.
Cost of labor
Everyone complains about the cost of shop labor. Seriously who makes $100-125 per hour? The problem is they forget what that $100 pays for. The tech doesn’t make $100 per hour, not even close. Most mechanics dream of making even half what the shop charges for labor.
Labor cost goes towards paying all the people in the shop. Even those who don’t directly work on cars. The service advisories, parts guys for big shops, and tire techs, and anyone else that gets paid straight hourly. Plus it also covers utilities, equipment, insurance, and costly mistakes. Lots of things. Not to mention there is downtime in even the busiest shops so you gotta average that in also. Just one of the things included in the cost of labor is what shop actually pays their techs. So trust the mechanic we he says he’s not trying to make his boat payment on your one repair.
3 common ways tech is paid:
There are three common ways a tech get’s paid. While all of these have their advantages and disadvantages. None of them buy the tech much more than 25-30% of what the shop charges for labor at it’s best. Most of the time the tech makes far less than that. Even the good ones.
Straight hourly.
Straight hourly is simple but has its problems. The tech has no motivation to work any faster than necessary to keep from getting in trouble. Plus it’s not like he makes more money if he works harder than everyone else. Straight hourly works great for busy shops that hire only the best mechanics who want to do the job right the first time. The same ones that work fast but aren’t afraid to take the time needed. If you find out your shop pays hourly for their mechanics you know you have some of the best mechanics that love their job.
Commission
Commission rate is normally a percentage of the total cost of the repair or just the labor cost of each ticket the tech works on. This works great to motivate a tech to find more things wrong with a car and work harder. As long as he has a good salesman to sell it all. Of course, this why people complain “they always find something wrong with my car”. The tech is thorough because he wants to make money. Although a good tech doesn’t suggest anything that isn’t needed.
The biggest problem with a commission is that, short of a percentage increase, the only way to get a raise is for the shop labor rate to go up.
Book Time
With book-time pay, the tech has a per hour rate but is only paid hourly based on the time a book says it takes to do the job. Not the actual time it takes to do the repair.
Example: the book calls for an hour to do a brake job. The tech gets paid $20/hour. Thus the tech makes $20 on that brake job.
It doesn’t matter if every bolt is rusted and it takes him 3 hours, he only gets paid for one hour of work. Of course, if he’s done in 15 minutes he’s still getting paid for an hour.
This promotes being fast, efficient, and doing as much work as possible. Of course, it also makes techs shy away from jobs that they can’t get done in book time. It also means that a great tech will be done long before the time the shop is charging for labor.
Cost of running a shop
The cost of running a shop is included in labor costs and parts markup. Which is a big reason for car repair costs. Not only does it cost to build a garage or rent one. It cost money for equipment, insurance, and utilities. Not to mention advertising, websites, and any training the shop provides.
The cheapest lifts cost $3000 to $4000 not including installation. Then there are alignment machines, which easily cost $50,000 or more. Plus tire machines, air compressors, and computer systems for tracking work orders, and billing.
You can then add in the cost of scan tools which are a necessity. Unless the shop requires techs to buy their own. A quality professional scan tool can cost a minimum of $1000 with yearly updates of almost that much. Whereas higher-end scan tools can cost over $5000. Plus other diagnostic equipment, such as smoke machines, 4 and 5 gas analyzers, which help with diagnostic.
Last, there’s the cost of keeping customers happy. Shops are expected to cover the cost parts that break coming off, warranty of parts even if they aren’t covered under manufactures warranty and all sorts of things. All understandable costs but costs none the less.
Cost of tools
Lots of people have questioned over the years why car repairs cost so much, without looking at the cost of the tools it takes to do the repairs. Part of the cost of labor is the cost of tools. Whereas most shops require mechanics to purchase their own tools.
Good quality tools aren’t cheap. Since cheap tools don’t last and mechanics can’t afford to stop in the middle of a job to buy replacement tools. Most mechanics spend a lot of money on lifetime warranty tools that they expect to not break.
Let us look at a couple of required tool lists just to get an automotive repair degree. Which is a far cry from what a mechanic needs on a daily basis.
Anyone of these Tool lists will cost a minimum of $2000, and up to $5000 depending on the brand and quality of each item. Plus the toolbox to store them in. Which even a cheap one big enough to hold everything is over $1000. Whereas a professional quality box starts at $5000. Large 2 and 3 bay toolboxes with side cabinets can run over $10,000.
Car Design
The last thing that really effects why car repair cost so much, is the car itself. Some cars are just harder repair than others.
Take for instance a VW Jetta where the first step in replacing the alternator is to remove the front bumper and grill. How about head gaskets on newer Ford Trucks where it’s removing the front clip and cab. Things like this add additional time and cost. Explaining why car repair costs so much.
Gone are the days where the tech could sit in the engine bay and work on your car. Some of today’s cars even require special sockets to replace the oil filter. It’s nothing to spend $100 on a special socket for one specific job for one specific make and model of car.
Then there are the wiring and computer systems on cars today. They are multiple computers in ever car that are networked together in a fashion that would make an IT guy jealous. This, however, can be a problem as when one sensor goes bad it can make others read wrong. Thus taking longer to find the actual problem.
These are just a few examples of how car design plays into why car repair costs so much. The true answer is as cars get more features they have more to break. Not to mention each new feature adds a layer of complication to the car that makes it take more time to fix.
Conclusion
There isn’t just one thing that explains why car repair cost so much. It’s a combination of car design, parts cost, labor and shop costs. They all add up to make car repair cost more expensive every year. Just as no one works a job for free mechanics like to get paid for their time and knowledge. They also want to cover their cost of tools just like the shop owners want to cover the costs of employees and overhead.