Is there a limit, so many % over wholesale price,what car repair shops can charge for parts,used in repairs, or can they charge whatever they want?
What kind of limit are you looking for? They can mark up parts 1,000% if they want, but it wouldn’t be good for business.
Repair shops have the “suggested retail” prices for the parts they buy. My data is stale on this but I remember it was often around 40% markup. Others may have better data on the markup commonly used today if it’s changed.
You also need to factor in how much time the repair shop invested in getting the part. If they simply made a phone call to the local parts store and got the part delivered, then a 40% markup is reasonable. However, if they spent lots of time trying to locate the part, and/or had to send an employee to pick it up, then the markup will be much higher (understandably).
I Know Of One Dealer That Programs Higher Mark-Ups For Lower Priced Parts
I realize that part of the price of replacement parts has to cover warehousing, ordering, production, etcetera, of sometimes “slow moving” parts. Therefore seemingly high prices don’t bother me too much. Especially if the part(s) are readily available.
I don’t blame dealers for wanting to be profitable. I know when I managed a dealer parts department we rounded every part up to the nearest nickel or dime. This “nickel and diming” caused all prices to end in zero or five and I’m sure helped out my commission check!
However, when I questioned the unbelievably high $8.50 price for a very insignificant part recently at a dealer, the parts person mumbled something to indicate that the computer defaults to a higher price on very inexpensive parts and being a user-friendly dealer, offered to “check something.” I was then offered the same part for something like $2.86. There are lots of these parts posted to repair orders that are never questioned by customers.
Because of slow car sales and people cutting their personal budgets, many dealers are experiencing a decline in service work as well, in many parts of the country, mine being one. I have noticed a propensity for higher labor prices (fudging hours) at shops struggling to survive in a poor economy.
I do a lot of shopping by phone for parts and service, before shopping in person.
America, what a country!
It’s called supply and demand. There is no LAW. They can charge whatever the public is willing to pay.
A car repair place is in business to make money balanced by satisfying a customer. You can always get a part cheaper than they sell to you likely however you get it. Remember a repair shop has to pay a fee to have parts delivered, and then has some guarantee around the work including the part, has to anticipate wrong part delivered(wasted time) and other factors.
My two good independents allow you to bring parts if you desire, have no guarantee on work, they charge by the hour not book rate mainly in case part is defective or wrong one, and increase their hourly rate to make a profit.
There’s no limit but most shops have a reasonable mark-up on their parts. Parts procurement often takes time, and time means money.
And shops do not get parts at a “wholesale” price. Generally, if a shop does a lot of business with a particular parts retailer they may get a 10% discount off of the regular retail price.
Really? Every shop I worked at got at least a 40% discount off most parts versus what someone who walked in off the street gets. Usually the mark-up would be about the same as the discount so we’d basically charge what the customer would pay for the part if they bought it themselves, or even sometimes less.
To the public there is no limit.
Now there is a limit what the manufauture will pay when it buys parts from the Dealer for warranty repairs.
That’s a pretty good racket, the Dealer buys parts from the manufacture then sells them back to the manufacture when they are used for warranty repairs.
caveat emptor- how true!!!
a recent repair cost for a leaky power steering hose:
power steering hose: $23.70
1 quart power steering fluid: $15.80, 5 times more than at Walmart
(the Walmart brand for a quart about $ 2.80 plus tax)
labor: $ 65.00
with tax, total cost about $113 for the whole repair-
When I arrived at the garage I didn’t know what the problem was. I waited at the garage to get it fixed, therefore I couldn’t have brought i.e. the power steering fluid. I also never had bought the item before in order to know the price.
I did not check what the retail price for the hose is. But I find the price for the power steering fluid hefty.
Another garage once wanted to charge $18.00 for a gallon of coolant. I brought my own.
caveat emptor- how true
here is a recent repair cost for a leaky power steering hose which needed to be replaced:
power steering hose $23.70
------------oops- sorry- just noticed I added my comment twice
power steering fluid, 1 quart, $15.80
total cost with tax: about $ 113.00
1 quart of Wal-mart brand power steering fluid about $3.00 with tax
I did not check on the retail price for the hose
I think to pay 5x the amount than what you would have paid at Walmart is hefty.
Really. I’ve never seen any parts house give more than 10% off.
Now most receipts show 2 retail prices; a “real” one and a “suggested” one.
If one knocks off 10% more then it’s quite possible there is a 40% difference between the actual price and the suggested one.
I’ve got a couple of receipts lying by the computer and here’s an example. (O’Reillys - water pump)
List - 74.56
Net - 43.99
The net is what everyone, shop or car owner, pays. A shop that’s a regular customer may get 10% off of the 43.99.
My feeling is the 74.56 is arbitrary and is nothing more than an attempt to make one think they’re getting a deal and a half.
Odds are the shop will bill the vehicle owner the “List” price though.
You see the same thing with furniture stores (sofa regularly a 1000 dollars, now only 499), music stores (guitar regularly 500 dollars, now only 299), etc.
Those items never sold for that inflated figure to begin with but it makes a sofa buyer elated to know they got a 1000 dollar sofa for “half price”.
I used to deal with NAPA on a daily basis and 10% off was it.
My information is very dated, but when I worked in three different shops as I worked my way through college in the 80s, we got our parts for about 30% less than the guy off the street would pay if he walked in to the parts store. Delivery to our shop was included in that price. Our invoice would have the ‘retail’ cost and our ‘jobber’ cost (30% less) on the invoice. The shops I worked at always charged the customer the retail cost for the part, so we had a 30% markup.
The dealers gave us no breaks on costs, other than some dealers would deliver parts to us. We paid what everyone paid, so on the rare occasion that we had to use dealer-only parts, we did not mark them up.
The dealer parts counter markup on parts depends on whether they are competing with a parts store to sell the same part (spark plugs, shocks, oil filters etc.) or dealer-only parts. Their markup is at least 100% (they charge twice what they pay) and may be up to five or six hundred percent on low volume dealer-only items. It costs a lot of money to keep a regional warehouse with millions of dollars worth of parts stored in it, or for the dealer buy a part and store it and keep track of it for months, just so they can have it immediately on the chance that some guy walks in and wants to buy it. The name of the game is volume and knowing what parts to keep locally.
I’ve yet to visit an independent mechanic who didn’t mark up his cost on the parts at least 100% over what he actually paid. Partly why I do most of my own repairs now.
That’s how the automotive business makes it’s money…we need to support the nearly 2 in 5 people in the work force connected with the automotive companies.
the mark up for the quart of power steering fluid was 500% -
When I worked for a shop, we went from charging the ‘book price’ (about 60-70% markup) to a straight 100% markup. It’s entirely up to the shop. Good reason to get 2 estimates!