Friday, July 24, 2009

The Scandal of Automobile Repair

No, I am not preparing to discuss how cars are so complicated that we are no longer able to repair them ourselves.  That is worthy of its own post.
No, this is about the cost of taking your car to a garage for repairs.
The pricing of automobile repair is established by coded standards based on units of time.  The labor costs based on these units of time are in excess of the actual time required.  The system rounds upward the unit of time, usually in 15 minute increments.  A 5 minute task will be charged as 15 minutes (or more).  A 35 minute task will be charged 45 minutes (or more).
These charges start with a base Labor cost of 60 minutes, due, I suppose, for the work required to start the process.   Some call it a 'hedge factor' to offset possible losses.
Added to these labor costs is the material cost of parts which is usually fixed at a straight 100% mark-up.
When the repairs are finished and billed, the customer finds at the bottom of the invoice, as a percentage of the subtotal for material and labor, a figure for Shop Costs, i.e., rags, hand cleaner, paper floor mats, etc.   This add-on percentage will run from 10% to 25% of the subtotal for material and labor.
I submit that this Shop Cost add-on is passing the cost of normal overhead on to the customer, a practice unheard of in the past.
I further submit that this whole policy is a form of price control and not free market capitalism.  It socialistic capitalism and works only to the benefit of the corporation.

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