Today I needed a window regulator replaced in a 2002 Bonneville. I took it to the shop and they quoted $330 for the parts and $89 for the labor. I thought the part seemed high so I called a dealer. The dealer quoted me $210. I brought this to the attention of the shop and after some irritated comments they agreed to match the dealer price.
I admit to being naive in thinking that shops generally charged for parts about what they cost them (or they got a shop discount and charged full retail). After researching these blogs I found that it is common practice for shops to mark up parts anywhere from 20% to 100% or more. I understand and love that this country has a free enterprise economy and that everyone needs to make a decent profit to provide for themselves and their families. But marking up parts seems to be a rather deceptive practice.
I think most consumers are like me and assumed that shops made most of their money off the labor charge. Most people understand and accept that a shop needs to make a profit and when they are charging $80, $100, or $120 an hour that their mechanics are not making that much. They need to charge more to cover overhead, profit, etc. I have no problem with that.
But for a competitive, free enterprise economy to operate efficiently, there needs to be a measure of transparency in order for consumers to make intelligent economic comparisons. Consumers can compare shop labor rates to help in making a rational economic decision, and it will not always be the lowest rate. I may decide to go with a shop with a higher labor rate markup because they are good at diagnosing problems, they fix it right the first time, don’t try to fix things that aren’t broken, etc. But it is hard to compare shops if you don’t know how much they are marking up parts and the markup can be anywhere from zero to double.
It seems that this is done intentionally because consumers believe that parts are a relatively fixed cost that the shop can’t control and consumers are more willing to pay for parts than for labor. You may say that the only thing that matters is the total cost, which is true. But then, why do shops quote the parts and labor separately?
Why do shops play this game? It seems that because consumers compare shop rates, but not parts costs because they have no context to compare parts unless they research it every time they bring something in. Most consumers don’t have the time to do this unless it is a major repair. If shops need to raise their shop labor rates to cover overhead and profit, it would seem to be more transparent and promote more efficient economic decisions in a free enterprise competitive economy. But that seems to be the point. Make it more complicated so consumers can’t do that.
Now I know this has been done for decades and nothing is going to change. You may say that consumers can compare shops on overall price, quality, etc., on a trial and error basis. But it seems like a expensive and inefficient way to find a good shop. And after you find a good shop after several bad experiences, what if you move and have to start the process all over again.