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flat rate manual

Just read your "honesty is the best policy" column and heartily agree with it.............. however, would you please address the use of Flat rate manuals to bill for the time it will take to accomplish 'every conceivable repair' for each make and model automobile. The manuals list the repair time billable by tenths of an hour. For example, replacing front struts on a particular model will be listed as a 1.2 hour job. The OFFICE staff will take the shop labor rate of $85 or $95 or more, times the hour rate of 1.2 to obtain the labor cost for the work done for any repair. "The problem is, that any mechanic that fails to consistently BEAT the flat rate manual will soon find himself out of job." In other words, shops consistently over-bill for labor costs. THIS, IT SEEMS TO ME, IS A SORT OF COLLUSION TO SET PRICES. ......... AND ON THE OTHER HAND, IS SNEAKY WAY TO MAXIMIZE PROFIT BY BILLING VIA THE RATE MANUAL WHEN THE MECHANIC IS ACTUALLY USING LESS TIME THAN IS LISTED IN THE MANUAL TO COMPLETE A TASK. This is also a way in which shop bonuses for various managers and even mechanics is calculated............ In other words how can the public have faith in an industry that on the face of it, is corrupt.

Respectfully,

Cliff Johnson
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Comments

  • Not a pro but 1.2 hours to change even one strut sounds like too little time to me. I'd do well to change one in a Saturday morning.

    I will relate to you a work friend's theory about high car part and repair prices that I heard many years ago. Don't fear or dread high part and repair prices. They keep the system healthy and prosperous enough for parts and service to be there when and where you need it. Isn't it good that when your car breaks, there are plenty of parts and people available to get you going again? If you don't like a mechanic, there is likely another a few blocks down the street.
  • edited January 2013
    Well, you're dead wrong in your logic. Labor manuals are a GUIDE and not etched in stone. There's no law that even says any shop has to use one at all. They can charge 4 hours per if they want to.
    Maybe you would prefer that a mechanic bills actual time and instead of spending 1.2 on a strut they could easily spend 3 hours per side while loitering around the coffee pot and bill accordingly.
    There is a lot more to that 1.2 hours mentioned than you could even dream of.

    It's probably useless to try and break down how the flat rate system works because it sounds like you have your mind made up already. If you were involved in actually working in the system and knew anything about it you might have a different outlook on it.
    This is especially true at new car dealers where mechanics have to wrestle warranty times.

  • A young mechanic just out of technical school will be paid the same amount for replacing the struts on a car as the 40 year veteran. The fresh man might not be able to do the work in 2 hours while the seasoned man might complete the work in 45 minutes. How should talent, experience and effort be rewarded, Rodac? Would you feel you got your money's worth if the new mechanic always took care of your car and struggled to do the work?
  • So we'll let Rodac actually PAY for the six hours the car was in the shop....all six of them....and THEN we'll see what the opinion is then !
  • edited January 2013
    Off topic but regarding warranty work I'd like to add this:

    A few cars ago when I had warranty work done on a recently bought new car, they must have given the work to a newby. The work involved replacing the heater core with disassembly of the dashboard needed. When I got the car back the mechanic at least had the courtesy to put the leftover screws in the gadget tray.

    I get it now, some warranty work is delegated to new mechanics. For that I will either do it myself if possible, ignore the needed work if safe to do so, permit a new mechanic to do the work if failure of the repair appears inconsequential or else take a chance on a new mechanic. Before I take a chance on a new mechanic with an important warranty repair I will ask to talk to the person who will do the work.
  • There are times when a shop will take a financial bath by charging the flat rate too. I had the brake lines in my '96 Plymouth (remember those?) and while it took a couple of days I only got charged the 1.5 or whatever the book says. Probably his first time; maybe a little more rust than the manual anticipates- but no way no how could I have done the job for what they charged.
  • One day I replaced 3 clutches before lunch and an engine that afternoon on Ford 1/2 tons while doing the usual duties related to managing the shop with 2 employees. The flat rate was well over 16 hours. But I don't need to remove the drive shaft or transmission from a 3 speed ford to replace the clutch or remove the hood to replace the engine because I have replaced so many and learned safe short cuts and fabricated special tools to speed up the work. More often than not my customers got more than they paid for, though.
  • If this is all about charging actual time spent, then I'm sure most mechanics would not have a problem stretching an oil change into a full day long job and charging 8 hours for it. Goodbye stress..... ;-)
  • The HVAC business is going the same flat rate system. In our shop, we charged $110 an hour, time and material plus markup on parts. We averaged 15- 20 complaints per month about costs and were going broke. After going flat rate and increasing our rate to $210 per hour with upfront pricing our complaints about price dropped to 0. We did lose bottom feeders like Rodac but good riddance. We now actually make a profit, are able to pay better benefits and now do a better job because our techs are not under pressure to finish in a certain time. Plus they are not overbilling if he is given a price out of the book. He pays what he agrees to and not a penny more. Why would a price be OK before starting a job and not OK after. It makes my blood boil when some numbskull who has never run a business thinks he's got all the answers and sees a crook behind every shadow.
    P.S. Doesn't the auto flat rate book give the mechanic the hours the book says? If it's a two hour job and he does it in 45 minutes or 8 hours, doesn't he get the same amount of money? Should Rodac get money back if the mechanic finishes quickly? Should he pay more if it takes longer?
  • The same point could be made about a dentist or roofer. The dentist is essentially working on flat rate when they quote a price for a cap and the same applies to a roofer reshingles a house at X dollars per square.

    My brothers in law are in the masonry business and I think they quote their brick jobs per 1000.
    They get the same amount of money no matter how slow or how fast the job goes.

    Mechanics also spend a godawful lot of time (for free) test driving cars, waiting on parts, doing the paperwork shuffle, or waiting on an authorization to fix the car because no one is answering the phone at the customer's house or they "want to think about it". The latter effectively ties up a rack and shop space; especially irritating when a car had to be pushed in or is partially torn down.
    The latter often leads to rounding the crew up and pushing it back outside while someone makes up their mind which means the other flat rate mechanics are earning zero while pushing.
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