Car garage rip off is this normal?

[Radio Flyer]

Funny,

I was at Ford dropping off another (3rd round) of trailing arm inspection (recall), and saw a customer with a fancy mustang carry in a container mobil one. He wanted an oil change, using the mobil one, with a motorcraft filter, done at a ford dealer. I think he was a regular because there was no fuss, and it seemed routine to the service writer.

 

[redrkt]

This is not a rip off my friend. Add to this the fact you claim to be an industry insider who has particular insight is really causing me pause to believe this is a troll thread akin to mentioning how you don't tip at a restaurant.

 

[ScottsGT]

My brother owned a Midas franchise and he did an exorbitant parts mark up as well. I’m talking about something I could walk in Advance and buy for $25 he was marking up to $75. Then he told me he was tired of customers complaining about it.
I asked him what scale was he using for markups? Said he was pulling numbers out of his *** to give the customers. Well, there’s your problem. Everyone knows how to go online and look up the price of car parts and they come to you asking about labor rates for the job. They’re already assuming you get parts at jobber pricing and you’re making money to cover overhead already. Then you hit them with sticker shock of what they have already looked at. I told him he should charge the same for the parts or maybe a 10%-15% mark up but pad the bill using labor times and shop fees for materials. That’s something they cannot look up on like to get sticker shocked with.
He didn’t listen, insisted he was right and declared bankruptcy shortly after.

 

[ScottsGT]

Funny,

I was at Ford dropping off another (3rd round) of trailing arm inspection (recall), and saw a customer with a fancy mustang carry in a container mobil one. He wanted an oil change, using the mobil one, with a motorcraft filter, done at a ford dealer. I think he was a regular because there was no fuss, and it seemed routine to the service writer.

That’s good to know. I only do my own because I want Mobile 1 and not the blend Ford uses. Now there’s no way I’d bring in my own Motorcraft filter, but those are the only ones I use. I did pay my dealership to change my trans fluid when my car was new. Well known issue with the MT-82 in the 2015 Mustang was notchy shifting between 1-2 and 2-3 shifts. BG trans fluid helped smooth it out. I think I paid them $40 labor for that. Money well spent. Service writer felt guilty charging me because I was trying to fix something everyone was raising hell with Ford about. Told him not to worry, tech has to eat.

 

[rayra]

I’m in the vehicle trade (specialist dismantler) and as a result I have a pretty good handle on the price of car spares.

I recently booked my Transporter van in for a service
Oil filter
Oil
Air filter
Pollen filter
Fuel filter

I was quoted all genuine VW parts and the garage sent through a breakdown of labour and parts – fair enough.

A quick look on line then a call to TPS (trade parts specialists) and I can save myself £70 on the parts alone.

So why are garages aiming to make a huge profit on supplying the parts at more then RRP when I am assuming they will be able to get the for less than me with their trade discount.

Surely the garages labour rate should take into account their overheads etc and making a small profit on the parts is acceptable so long as you are still supplying them for less than joe public can buy them for.

How much of that is driven by Euro VAT?

/but markup on parts is the norm. Everything's padded.

 

[FMB4]

To the OP; nobody forced you to pay the estimated price. Again, find another shop that you're OK with in regard to the estimate price. Again, otherwise do the work yourself. These one sided 'rip-off' claim threads are getting old.

 

[PWC Repair]

This is Garage Journal Forum, what do you mean you paid somebody else to do a simple maintenance???

 

[Lassen Forge]

If you need to pay someone to do simple things, then you need to pay them for their time. Otherwise take the day off and do it yourself.

BTW - How many people LOVE working as a wrench and having the customer supply wrong-application Dorkman parts and INSISTING that it's the right part, you install it, and charge less than book?

 

[Copymutt]

It no longer matters what trade you are in. Our society has been politicized & inflated to the point of no profit. Skills no longer are of value when a non interested trainee makes nearly as much as a certified tech. I do see one man operations working our of their own garage making a go of it, but even that is fraught with some big exposures.

 

[Johnny chaos]

I think every other aspect of this conversation has been covered pretty well. I will speak to my experience installing customer supplied parts. I explain upfront to the customer that we are not supposed to install customer supplied parts but if we do because of whatever variable there is absolutely no warranty and I write it on the RO....but even after that discussion, I have had customers try to return and seek warranty when the part they supplied failed.

Or the parts are completely wrong; not even in the ballpark close and now I have a vehicle apart and a bay *******. Also when we supply the parts we warranty the parts/labor nation wide as our suppliers offer us a warranty and will do labor claims if reasonable, to reimburse us for our labor. Lastly, I always quote the total price prior to repair, if you don't think its fair lets talk about it before the work is started and we can renegotiate or you can go elsewhere.

 

[landrover bodger]

How much of that is driven by Euro VAT?

/but markup on parts is the norm. Everything's padded.

VAT is 20% on the total cost parts and labour in the UK .

 

[haveissues]

I'm cheap and do my own maintenance because I'm A) cheap like I said and B) want it done right.

I work in an completely different industry but you are either paying me:
a) to order everything and I mark it up
b) for my time to consult with you and help you order everything
c) you can get everything on your own and pay me for my time to fiddle with the wrong thing you purchased.

Ordering things takes time and so does ordering the correct thing to be there at the correct time. I'm getting paid for my time.

One way or another I'm getting paid and 9/10 times a and b are your cheapest option with the best outcome.

 

[The Cobbler]

OP, look at your own business. the car is bought at wholesale price, you dismantle parts & sell them at a profit that far exceeds the price that was paid for the entire car. what's left is scrapped , at more money to you . why do you not give the scrap away since you've already made your money on the parts?

 

[rjn2649]

Similar. I worked for myself, sound/access control/home automation....
There were times I would replace a speaker, or some such, and the customer would ***** about price of materials, that I had in my van. Honestly often times they could buy stuff online (gray market, no warranty) for about what I paid. BUT I CARRIED STUFF IN MY VAN THAT I PAID FOR UP FRONT.
My answer was always "you got one now? I'll install it. I can charge you for my time now, you can order one and install it yourself, or pay me to come back and install it, with out a warranty."
I don't think paying someone a profit to pay for, and warehouse materials, is a bad thing. As others state: Rent, paying an employee, taxes on inventory, how long do they keep that part before it sells, or how long do I keep a part before I deem it "useless" and scrap it?
Business are there to make money, if I don't want them to be around for when I need them I won't go there...

 

[unslow1]

My brother owned a Midas franchise and he did an exorbitant parts mark up as well. I’m talking about something I could walk in Advance and buy for $25 he was marking up to $75. Then he told me he was tired of customers complaining about it.
I asked him what scale was he using for markups? Said he was pulling numbers out of his *** to give the customers. Well, there’s your problem. Everyone knows how to go online and look up the price of car parts and they come to you asking about labor rates for the job. They’re already assuming you get parts at jobber pricing and you’re making money to cover overhead already. Then you hit them with sticker shock of what they have already looked at. I told him he should charge the same for the parts or maybe a 10%-15% mark up but pad the bill using labor times and shop fees for materials. That’s something they cannot look up on like to get sticker shocked with.
He didn’t listen, insisted he was right and declared bankruptcy shortly after.

The owner/manager of one of our franchises several years ago did basically the same thing by raising the price of a soft drink to $3.25 in his restaurant. Several of us tried to tell him that just wouldn't work because everyone knows what it really costs. He wouldn't listen and it became a discussion you could hear at every table. He not only didn't get an increased profit he lost most of his soft drink sales. It was about a year later he sold it because it was no longer making much money.

 

[mopar4u]

 

[banjopete]

We're not their bread and butter.

They depend on the people that don't know any better and think that whatever the price they paid for the job/service/part is totally reasonable since the repair was completed and they're back on the road in their car driving happily once again. It's a service, you pay for it.

Full credit to them for being able to make it work.

 

[mz44]

I have an account at the local parts store (I'm just a diy guy not a shop). When I get parts the slip shows retail price say $50 and then what i get it for $37. The retail price is what the shops will charge.
My buddy is a general contractor, when he bids a job he marks up the price of the sub contractors and the material. The plumbers price is $5000 he marks it up 20%, lumber quote is $10000 marked up to 12. Everyone gotta eat

 

[James-W]

I do as much work on my vehicles as I can, but now that I am older the amount of work I can do on them is a lot less. One thing is the arthritis in my hands makes things more difficult and the other thing is many times today's vehicles require tools and equipment that I don't have. I depend on the dealer where we have been buying vehicles for many years and they do the work that I am not able to do, or that I am not willing to do. They don't do the work for free obviously, but they do a good job and they do it for what I consider to be a fair price.

 

[niget2002]

Part of that profit margin is them warranting the part. If you get 5 miles down the road and the part craps out, then they'll replace it. They might get that money for the part back from the manufacturer, but not the time it takes to replace a second time.

 

[goingtoarizona]

It costs to be in business. As a "Auto Wrecker" you must certainly know this. Even though it costs very minimal to purchase a wrecked car for your yard, you probably still have multiple employees removing parts, organizing them, pricing them, answering phones, you have to pay bills, rent/mortgage. taxes. I wouldn't hesitate to say that you make 90% when you sell a part, but I understand that you have expenses you have to pay regardless if you sell any parts today.

The shop that did the work has just as many, and maybe more expenses than you have in your own business. Whoever owns that business should earn enough to pay expenses, pay their employees enough wages to keep them satisfied, and when it's all done, eek out a profit to reward all their expenses and risk of investing in the business.

Life is expensive, either do it yourself or be thankful that you're in a position where you can pay someone else to do it.

 

[CaptPat]

I do what maintenance I can to avoid the parts and labor markups at the dealer. I really get frosted when the service writer at the dealer keeps trying to talk me into maintenance not required by the service manual or better yet to use the heavy-duty service schedule for a truck occasionally used to haul the boat to the ramp and back. Lately, I found out that my old dealer charges 2 X the labor rate to work on diesel vehicles regardless of whether the work has anything to do with the engine and other specialized components associated with the engine.

 

[gmcgeo]

I would be more worried that im paying for an oil change and its not getting done.... Those 19.95 specials

I remember watching those videos of ppl going undercover and catching scamming oil changes

 

[dcg9381]

wow - the quality of many parts today is so junky that some shop owners I know spend more time trying to source a good part than working on a car.

Having sold and sourced car parts as a "side business" for a while, I can tell you that this is definitely the case. Parts that often "look the same" are not at all the same.

I have a buddy that has a full time business modifying cars. Their initial niche was putting LS motors into BMWs and specialized in camber plates, brakes, suspension setups. They don't let customers bring their own parts. Why? Because supply chain is very bad right now and when a customer brings parts that might be missing something (say like a special brake line) - it means that the customer's car sits for months until they can source that part. It backs up the entire shop if they have a few cars that are sitting for months.

 

[mepstein]

I pay my mechanic a price that both of us feel is fair. I don’t look up the parts to compare wholesale to retail. The prices seem reasonable, he does excellent work, he is nice to me and my family. It’s been that way for the last 28 years.
If I need to save money, I’ll look for other ways.

 

[ycgoat]

I just spent $130 to change my own oil in 2 vehicles, and I have definitely had shops try to rip me off. Most recently was for an inspection sticker. I was outside my usual area with waiting on some contractors and figured I would get a State inspection. The owner inspector sent a kid out to tell me my power steering was spraying fluid and needed to be replaced and showed me a puddle on the floor. I said no its not and the kid apologized that is what the owner said. I left went through the system with a fine tooth comb and other than the fluid they dumped on my engine, there were no leaks.

 

[ScottsGT]

When I restored my ‘66 Mustang about 1/10 of the “reproduction” parts had to be returned or tossed. Some only closely resembled the factory original. Some were even a safety hazard if you used them.

 

[brownbagg]

your paying for the warrenty if that part breaks and have to be redone at the garage cost.

 

[65ranchero]

When I was still working on the line in a dealer I would see things being billed as whole unit where a small amount was needed.
One example, when we would do brakes the mfg. liked us to use a specific type of silicone grease in the pad to bracket surface,
a small dab was all that was needed and a tube of it could probably last 3 to 6 months. Every car that got brakes had a tube billed out and it was not cheap.

Another profit maker was " shop supplies" as I recall it was around 10% of the total (didn't matter if it was for a quick oil change or a trans swap)

 

[PugetDude]

Worked at a Texaco station in the late 1970’s. Had a guy that owned a restaurant come in early one Saturday morning to drop off his car for an oil change. He handed over a bag with 5 quarts of oil, an oil filter, air filter, etc. from the K-Mart across the highway. Told us he wasn’t going to pay our exorbitant markup; here’s proof of what the stuff should cost. He was a recent immigrant from the Middle East; apparently that was not unusual there?

The owner of the station told him no problem, we would get it done and even drop it off at his restaurant just as soon as we were finished.

He told me to get it done first thing, then had me follow him up to the restaurant to deliver it. I was surprised when he pulled into the grocery store instead. He bought a dozen eggs, a pound of bacon, hash browns, coffee, and orange juice. (You know where this is going…)
Marched into the busy restaurant, handed him the bag; informed him he was sick of paying his exorbitant markup and told him to make us breakfast, we’d be taking it to go for the rest of the crew back at the station.

We all had a good laugh; (probably because the place was full of locals; he didn’t want to make a scene) and he did cook up a nice breakfast for the crew.

He never pulled that **** again.

 

[jagboy69]

As much as I hate markup on parts, I totally get it. It takes time to RESEARCH part numbers, then SHOP for the parts, then you have to PAY for them so you have them on hand when the customer shows up. Try that when it's a guy with an airplane that needs 14grand worth of engine ignitors, oil filters that are $200 a pop, oil that is 24bucks a quart and tires that are 2grand a piece! (If you can even get them these days)

Now said customer decides he can save a few bucks and goes somewhere else! And they wonder why we order parts on day one and have them sent next day early delivery.

 

[Leaflessshadetree]

My brother owned a Midas franchise and he did an exorbitant parts mark up as well. I’m talking about something I could walk in Advance and buy for $25 he was marking up to $75. Then he told me he was tired of customers complaining about it.
I asked him what scale was he using for markups? Said he was pulling numbers out of his *** to give the customers. Well, there’s your problem. Everyone knows how to go online and look up the price of car parts and they come to you asking about labor rates for the job. They’re already assuming you get parts at jobber pricing and you’re making money to cover overhead already. Then you hit them with sticker shock of what they have already looked at. I told him he should charge the same for the parts or maybe a 10%-15% mark up but pad the bill using labor times and shop fees for materials. That’s something they cannot look up on like to get sticker shocked with.
He didn’t listen, insisted he was right and declared bankruptcy shortly after.

The Midas business model. Was a "lifetime warranty" on the muffler. The muffler was the lowest cost possible (but gold colored so it looked good). Muffler lasts a short time, customer returns because "lifetime warranty". Sell them new exhaust and tail pipes (at an inflated price) and the customer happily pays labor. Customer is happy because they got a free muffler.

 

[slowtwitch73]

Fawk paying more than MSRP.

 

[lotsatools]

Shops dont decide markup on parts they use software that calculates a price based on labor rate book time and parts markup matrix. Really its the engineers at fault not techs and the shops they work for. They design cars with bolts put in backwards so more dissassembly is required which increases labor time. Software engineers create the software that shops use to write invoices. Then customers complain jobs take too long when we can't get parts or get sent the wrong parts. Even better they dont understand why we dont want to warranty the cheap part they bought online that might not even fit their car. Don't like prices work on your own POS, BUT remeber dont ask us to loosen a nut or fix your screwup on the cheap (we will though cause we feel bad and it should only take a few minutes oh wait an hour went by) we've got customers that are willing to pay for quality service and parts that come with a warranty on parts AND labor. Im a tech that understands not all shops are honest (have never sold a service that was not needed and have declined a few not needed at the time customer advised of the situation). Just rememer book time hourly rate shop supplies parts cost is irrelevant. You pay the total bill plus tax that is the number that matters. Divide cost minus parts per hours you would have taken to do the same job. Drive away and no grease on your hands fixed right the first time is what costs money same as any other trade.

 

[Ricky Joe]

As much as I hate markup on parts, I totally get it. It takes time to RESEARCH part numbers, then SHOP for the parts, then you have to PAY for them so you have them on hand when the customer shows up. Try that when it's a guy with an airplane that needs 14grand worth of engine ignitors, oil filters that are $200 a pop, oil that is 24bucks a quart and tires that are 2grand a piece! (If you can even get them these days)

Now said customer decides he can save a few bucks and goes somewhere else! And they wonder why we order parts on day one and have them sent next day early delivery.

When I was learning to fly, the proprietor of the flying service was so cheap that he ran 7-11 gas instead of AVGAS. He traded my mechanical expertise for fly time. I have overhauled Lycoming and Continental engines. I am not an A&P. He would have me rebuild alternators. When we would go out to eat, he would put a fly in his food so he wouldn’t have to pay when it was his turn. I don’t know how he got the work signed off, but I guess he did. This is a true story, hard to believe!

 

[Sumboodie]

Grease Monkee charged me $96 for a standard oil change last month on a 2008 Chrysler T&C. 2020 Chrysler Pacifica oil change and service at the dealership last week was $121. It's the new "norm".

When I worked as a lube tech oil changes were $29.99!

 

[Ricky Joe]

When I had my garage, I did get parts cheaper than the customer, due to volume. I marked them up 30% across the board. No garage can stay in business just on labor charges. My rent was $600, I had lights and utilities, taxes, labor, insurance, the occasional mistake (I once overhauled an engine, still smoked, redid the heads, still smoked: it was the turbo. I ate everything but the turbo.) Labor rate was $25/hr, not flat rate. You also occasionally get stiffed. One young couple could not afford the clutch job. I let them go on a promise to pay, and that is all I got. Another guy would pay on his bill a little, but run it up more. I think he was about $1200 in when I had to quit carrying him. Then there is employee theft of material, tools, and time. And you can’t bill for the time you spend doing paperwork, cleaning up, making and receiving calls, and generating business. And advertising is another expense, if you do that.

 

[Ricky Joe]

No, it's not a ripoff.

Yes, parts markup is perfectly normal the world over.

Yes, lots of things have started to cost more of late.


I work in a very, very different business, but we've found pretty consistently that things go much smoother if you just put one final number on the estimate and invoice (and make sure they're the same). Itemizing is just an invitation to fret, whine, and chisel.

I always itemized. That gave the customer a sense of what was done, and me a record. That way, if there were to be a problem, I had a way of knowing what it could be. I recently had a transmission fluid change and service on my VW. There was no filter on the invoice. I went back and asked. They didn’t change the filter because access is difficult and requires quite a bit more labor. I won’t be going back or recommending this highly reputable shop.

 

[Glemon]

I do most of my work myself, I also don't like the mark up on parts, 10-15% sure, 30-50% kind of torques me off. Customer looks at a service station/garage/shop as be in the business of fixing cars and make money off that, not selling parts, and also assume that parts are available to the shop at a lower rate than retail.

The often cited comparisons to restaurants are pretty lame, they are not selling you groceries, they are serving you prepared food, the markup is for the service and the prep.

When I didn't do the work myself I had a great mechanic who would let me bring in my own parts. I would buy quality stuff and everything needed for the job. No problems. He had a great reputation, honest and competent, running out of a two bay (former) gas station.

Would prefer to pay labor rather than parts markup for parts related labor. Some jobs skew towards parts cost and some labor, would prefer the charge more accurately reflects the job. Know nothing I say will change anything, but I am pretty self sufficient and except for a few jobs it is by choice rather than necessity that I take my car in.

 

[lkjk]

Anyone ever think shops charge so much because there are enough customers willing to pay it and and not enough other shops that charge less to set that as the normal?

Personally, I've only taken my cars in maybe 3 times in my life because I didn't have time and they were bigger jobs. Other than that it's not worth it to me since I can DIY and labor is usually 80% of the cost to have anything done. Shop owners aren't getting super rich though and while the lack of transparency is annoying the huge overheads are real.