Mechanics and parts pricing mark ups


#1

After recently having some work done on my car i noticed something i hadn’t in my past trips to the mechanics. That is the parts i was being charged for were about 40% more than what my own research had shown them to be. Like alot of car owners i try to do most of the work myself but when a job is looking to involve too much time, alot of frustration, and maybe a couple of broken fingers i turn to my neighborhood mechanic. I always expect the labor charge to be pretty heavy but like i said it’s something i either don’t think i can do myself or would just take too much time so i’m more than willing to pay an expert who can probably knock it out in a tenth of the time. That being said after i called a couple of parts wholesalers i learned that supposedly a price markup of 40% - 50% is common on the part of shops. Maybe i’m just naive but having a steep markup on a part i could go buy down the street just seems to be dishonest. So i guess my question is how true is this across the board?


#2

It’s been this way forever. Did you just figure it out? You have a choice; pay the mechanic or buy the parts and do it yourself. The mechanic is in business to make money. How is that dishonest?


#3

If the part fails, who expects the mechanic to pay for it? How about the labor costs? Mechanics, as everyone in this world, should be allowed and expected to make a profit. I have actually seen many times when the mechanic charges twice what he paid. However, like I said, if the part fails (even if it is replaced by a manufacturers warranty) would you be happy to pay the labor charges again?

ref


#4

Mechanics, and any other service provider does this. When I was in the stereo repair business we marked up parts, too. Some auto parts stores and dealer parts departments will give professional mechanics a price break on parts, fully expecting the mechanic to mark it back up to full price.


#5

There are 3 prices for parts you but from a parts store: Wholesale, retail and list. Wholesale is what your mechanic pays, retail is what you’d pay if you bought it at the same store, and list, the highest, is what you pay the mechanic.

It’s always been this way, it’s the same with everything you buy. Every time someone touches an item they mark up the price. If you don’t want to pay list price, buy it and install it yourself. This is how capitalism works.


#6

This is a normal and common part of the business, for all the reasons others have mentioned. Actually, the good news is that the places that sell the parts to shops, including dealer parts departments, give them a “shop discount” of typically 10% to 15%. If you ask for the discount when you’re buying parts, lots of places will give it to you! At least that’s been my experience.


#7

Your neighborhood mechanic is in both the service business and the parts business, just as a new car dealer. There are certain common parts that your neighborhood mechanic has in stock. He then has money tied up in inventory. If he had the money on deposit at a bank, he would make interest. He has to be in the retail business to sell the parts he keeps in his inventory. If he doesn’t have the part in stock, there is time involved in obtaining the part–telephone call time and possibly going after the part. Furthermore, if the part is defective, your neighborhood mechanic will make it right. Part of the mark-up is warranty compensation for his labor.

I like to see an independent shop make a reasonable profit. This is the way the shop stays in business. I use Wes’s rule on my auto repairs. I have a friend that I grew up with named Wes. He later lived around the block from me. I was replacing a water pump and really turning the air blue. He must have heard me, because he came around the corner and said “Why are you doing that? From your foul languge you obviously don’t enjoy it. Use my rule–if something that I don’t enjoy doing is going to take me more than 15 minutes, I pay someone to do the job”. I have a good independent shop that I trust for the work. Besides, 3/4 of the Earth’s surface is water–I think this means that a man should spend 75% of his time fishing.


#8

Do you know of any wealthy auto mechanics? I don’t. Trades people such as plumbers, electricians, and masons make plenty of money. Carpenters don’t do too badly too but I don’t recall ever hearing “auto mechanic” as the answer to the question: Who’s the rich guy with that fancy car and house?


#9

We had an interesting related discussion a few months ago in A Vist to the Parts Department. It may be informative to you. Check it out if I can get the link thingie to work:

http://community.cartalk.com/posts/list/153809.page


#10

the carquest i use most frequently always has the words “preferred customer” under the “name” heading ono the receipt. i had seen the heading “cash customer” bfore but didn’t realize the difference.

i noticed the two prices on the bottom, listed as "list, and then, “your price” i was always happy getting for “your price”

well, after one time they gave me the wrong part, and i eventually got the right one, the guy says: “the part is 6.00 more”

he re printed the sales receipt with the new price, and the heading, “professional discount”. i didn’t have to pay more!

so guess what, now when i go ask for price somewhere in the middle of the conversation i just say, “professional discount” and i get the lowest price!! who knew?


#11

Thanks for the replies guys. Looking at it from a warranty standpoint it makes more sense to me. I guess i’ve just taken good enough care of my vehicles that i’ve never had to spend too much time at the mechanics thank god. I don’t have a problem with anyone making money as long as they do it legally and ethically and my corner mechanic is a great guy who provides a valuable service to this community. I was just originally looking at the problem as a case of say, if i told a man i wanted to buy his horse and he said it would be $500 but if i wanted the horse and bridle it would be $700. Crappy deal but if you look at it in the way that if anything happens to your horse and the man who sold you the horse would take care of these problems for a year its not so bad.


#12

Actually, I do know a wealthy auto mechanic. And he got there through hard work, professionalism, honesty, and sacrifice. And luck. And yes, he follows the standard business practice of taking the professional discount on the parts and marking them up to the customer.


#13

The folks I know that own good shops are doing OK. Just like any job, you ned to have your own deal, not work for someone else. The owner of the shop I use has about 10 techs working for him and is very busy. I’m sure he has a significant investment in his building and equipment, but he seems to be doing just fine.


#14

Some dealers charge you more for a part they install than they would if you bought it at their parts dept.


#15

Auto parts start at 'wholesale distributer" level and end at “List Price”. There are 5 or 6 price sheets (levels) between these two end points. Repair shops ALWAYS charge “List Price”.

Discount auto-parts stores eliminate the “distributer” and “jobber” and “stocking dealer” price levels and so can undersell traditional parts stores by about 40%.


#16

You must not know many mechanics. Boat payment, nuthin’. I know at least two mechanics who own their own airplanes. One keeps his behind his house and flys off of his own strip. Don’t even try to tell me a mason, plumber, or electrician makes more than he does. It’s really a pretty good line of work, highly skilled, and well paid.


#17

Do you know of any wealthy auto mechanics?

I know a few. One of my neighbors is pretty well of. Certified Mercedes mechanic. Owns a nice $750k house. I put is salary well over $100k.


#18

Keep in mind when a mechanic replaces parts on your car he has to go to the store and pick up the parts or have them delivered. There is a cost associated with that. If it is something he stocks, like a common filter there is a cost to carry that inventory. It is fair to mark up the parts. The real question should be how much is a fair mark up.

I know this is a little off topic but some of these posting are interesting.
When all you have to do is say “Prefered Price” at a parts store to get the discount it seems ludacrous. I would like to think the discounting is related to sales volume but from what people are posting it seems somewhat arbitrary.

I preferre using locally owned independent stores but this is one area where the chains kill the independents and that is on pricing.
With the chains you can price and compare most items off the internet. The cost is usually lower than the independent who you have to call, and get put on hold for 5 minutes to get their retail price. All of the chains in my area charge the same price for a given item but the independently owned stores(NAPA, Autovalue) in my area sometimes have different prices for the same item. They tend to make it harder for the consumer.


#19

Keep in mind when a mechanic replaces parts on your car he has to go to the store and pick up the parts or have them delivered.

Every mechanic I know who has parts delivered pays LESS for those parts then I do when I walk into the same store and pick the part up myself.

Personally I don’t think a mechanic should charge more for the part then I can buy it for. They’re already making money on the part…at least in most cases.


#20

The last time I paid a hospital bill it included a charge for $24. for three Tylenol. I wonder if they paid less than I do at Walgreens?