Worrying whether or not you were overcharged for your car
repair is an awful feeling. There's tons of advice on how to
avoid getting ripped-off, but few discuss the actual car repair
prices. We really need to look at the charges on a car repair
estimate or auto repair invoice to determine if we're paying
too much.

The focus needs to shift from giving outdated and ineffective
advice to addressing the "actual" and "specific" charges. Are
they legitimate charges? Can they be justified by industry
guidelines?

Now car repair estimates can be confusing. So let's break it
down to get a better idea if your auto repair shop is billing
you appropriately.

First, a glossary of terms is in order, as the auto industry
has a language of its own…

Aftermarket Parts: parts not made by the manufacturer.

MSRP: Manufacturer's Suggested Retail Price

OEM: Original Equipment Manufacturer. Manufacturer approved
parts designed specifically for your vehicle.

TSBs: Technical Service Bulletins. Notes and instructions

provided by the manufacturer for known and specific
concerns(they are not recalls).

Flat Fees: services such as alignments that don't get broken
down into parts, tax, labor

Miscellaneous Charges: these can include, but are not limited
to shop supplies - rags, chemicals, hazardous waste disposal
fees, waste oil ...etc.

Labor Rate: a repair center's hourly charge to service your
vehicle

Labor Time: the amount of time or hours determined that it will
take to fix your vehicle

Labor Description: the step-by-step written details of repairs
and/or services

Ok, let's look at the Anatomy of an Auto Repair Estimate:

There are six basic components to a car repair estimate

1) Customer/Vehicle Information
2) Parts
3) Labor
4) Miscellaneous Charges
5) Flat Fees
6) Summary of Charges

Customer and Vehicle Information


Using a generic "top down" style estimate, the top portion
simply contains your personal information and your vehicle's
specifics: year, make, model, mileage...etc, as well as your
request or concern.

We also want find the shop's labor rate. The labor rate is
critical in determining if you paid too much. Most repair
centers don't list the labor rate. We'll discuss why shortly.

Auto Parts

Parts are listed usually with a brief description, as well as
the quantity, and the price. There are three types of parts:
OEM (parts made by or for a manufacturer). These are the parts
installed by a dealer, although many local shops use OEM parts
too.

Aftermarket parts are non OEM parts, and there are various
degrees of quality, depending on the brand and where they're
made – China versus USA, for example.

Then there are Used parts purchased from a salvage yard.

To determine if you paid too much for parts, first find out
what type of parts are being used. With OEM parts, you don't
want to pay more than MSRP, although most people do without
realizing it. Premium aftermarket parts are similarly priced
across brands, although beware not to pay more than MSRP, which
again, many folks do. Used part prices are all over the place,
so pick the price in the middle.

Auto Repair Labor

Labor is billed in tenths. So 1.0 equals 1 hour. 1.5 equals an
hour and a half.

Labor rates range from $60 to $100 per hour at local repair
shops and $80 to $140 per hour at the dealer level. Labor times
are based off established industry guidelines, which are
frequently abused.

If you don't see the shop's labor rate posted on the car repair
invoice, ask your service center for the rate. Repair shops can
manipulate the labor rate (among other things) with a labor
matrix. Matrix pricing is a complicated and ethically
questionable practice discussed at length in RepairTrust
literature. What you need to know is that you can pay as high
as $150 per hour rather than the posted labor rate of $105 per
hour.

To ensure that you're being charged properly, you'll want to
multiply the number of hours billed (which is also often not
posted) by the shop's labor rate.

Most labor descriptions are poorly written and difficult to
understand. So ask questions.

Here's a "clear" labor description for a 30,000 mile service on
a Toyota Camry.

Performed 30,000 mile service per customer request, and in
accordance with manufacturer guidelines. Changed oil and
filter, installed new air filter, cabin filter and performed
all necessary tests, checks, and procedures, including road
test (miles 30,123 – 30,125). Performed lubrication services
and confirmed proper vehicle operation. Set tire pressures, and
checked fluids, belts and hoses. Note: vehicle is pulling
slightly left. Needs alignment

Miscellaneous Charges

The bulk of your car repair invoice will be parts and labor,
but we can't forget about Miscellaneous Charges. These charges
can include, but are not limited to, shop supplies - rags,
chemicals, hazardous waste, disposal fees, waste oil ...etc.
The latter of these may be billed out separately in a summary
at the bottom of your repair invoice.

Very few of these "extras" are actually used during regular
repairs. Miscellaneous charges are calculated off the amount of
labor hours billed, not the amount of miscellaneous items used.

Flat Fees

Flat fees can be another very tricky area. Flat fees are
services, such as an alignment, which don't get broken down
into parts, tax and labor. This makes it difficult to determine
the real and fair price. On the plus side, most flat fees are
competitively priced.

Be warned however, another term for Flat Fee is called Menu
Selling. In other words, you might see Tune Up: $99.99 or
Transmission Flush: $89.99. Follow your manufacturer's
recommendations only, not a dealer's or repair shop's menu.

Summary of Charges

The last part of an auto repair estimate is the summary of
charges. It's usually found in the bottom right hand corner of
the invoice. Check it against the charges above to ensure that
it all adds up mathematically, as well as logically.

This basic estimate outline may differ from your particular
invoice, which may have other categories such as "Sublet" or
"HazMat."

A sublet charge is added when your auto repair shop uses
another vender to fix or repair your car, such as a glass
company that replaces your windshield.

A HazMat charge may include waste oil or other disposal fees.
Just make sure that the charges are warranted, as again, they
too are often calculated off the labor time rather than actual
need.

In sum, understanding the "actual" charges, asking the right
questions, and breaking down your auto repair costs is the best
way to avoid paying excessive car repair prices.
About The Author: Ted Olson is the founder of RepairTrust - a
website dedicated to help the auto consumer avoid the pitfalls
of the automotive industry
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