Car Repair Prices: Why Your Oil Change is Never Just an Oil Change
By Theodore Olson
For a repair shop, there is little profit in the $29.95 oil change. By the time a shop pays its technician, pays for the oil, the filter, and the hazardous waste disposal fees, theres no money left. This low profit margin is worsened by the extremely competitive Quick Lube business, which forces local repair shops to refrain from raising prices, despite rising costs.
This all begs the question: If oil change specials, which range from $15.95 to $29.95, clearly produce very low profits, then why do so many service facilities advertise oil change specials?
The answer is actually very simple: It gets you in the door. Service centers know that once they have your vehicle, they can sell you additional work.
Suggesting additional work is called upselling, and its a primary profit tactic of every service facility. Heres a typical example. You drop your vehicle off for, just an oil change. Upon completion your service representative smiles and proudly states, We noticed that your air filter was dirty; so we popped in a new one. You may think, great, what wonderful service!
What really occurred is that you were casually upsold an air filter. It probably wasnt needed; it
certainly wasnt replaced according to any factory recommendation, and you were definitely overcharged for what was most likely a poorly-fitting, aftermarket, inferior air filter.
Heres a real-life example that occurred recently. This particular vehicle had 54,000 miles on it, and was dropped off at a local shop for, just an oil change. Upon paying the bill, the customer was handed an estimate for $199 to replace his air filter and top radiator hose. Shocked at the price, he called me.
After review, I found that the air filter suggestion was premature. It didnt need replacement until the manufacturers recommended 60,000 mile service interval. The top hose was also premature. In fact, it did not need replacement at all, despite a very minor problem easily addressed during the factory maintenance schedule, at no extra cost.
Check out the aftermarket part prices quoted below (including the unnecessary radiator hose). Compare these to the manufacturers suggested retail price (MSRP) for the factory OEM parts (Original Equipment Manufacturer).
Local Shop Aftermarket Air Filter: $32
Manufacturer OEM Filter, MSRP: $17
Local Shop Aftermarket Top Hose: $36
Manufacturer OEM Top Hose, MSRP: $19
Notice that this local shop was doubling the price of the OEM parts with its inferior aftermarket parts.
Now, lets look at the labor time that was quoted.
Local Shop Labor Time: 2.0 @ $60 per hour = $120
Manufacturer Labor Time: 0.9 @ $60 per hour = $81
Notice that the shop labor time estimate for the repairs was 2 hours. This is more than twice
the manufacturers recommendations (even after calculating manufacturer times against the industry standard multiplier).
Had the local shop abided by the vehicles particular maintenance intervals instead of trying to make a quick buck, it should have recommended a 60,000-mile service at the next visit. This would have better served the client, saved him $199, and maintained the vehicle properly. Instead, they lost a client, forever!
What needs to be made crystal clear is that this type of price-gouging occurs every day in every type of service facility in one form or another across the automotive service industry.
This type of price-gouging is considered normal!
Theodore P. Olson (Ted)
Car Repair Help
Ted holds extensive certifications from Mercedes-Benz, Toyota, General Motors, ASE (Automotive Service Excellence) and more. Over a twenty-year period in the automotive service industry, he has served as a technician, shop foreman, shop manager, shop owner, service advisor, service manager, and service industry consultant.
Other Works by Ted Olson Include:
ARREST the Automotive Service Industry!
Maintenance Myths: A Step-by-Step Guide to STOP Getting Ripped Off!
Auto Repair: The Shocking Truth About Whos Ripping You Off and Why!
Automotive Service Pricing Strategies a fair pricing guide for service centers
Being the Best a comprehensive customer service handbook for service advisors
Service Center Personnel an auto repair informational for general service staff
Service Mission Statement a philosophical proposal to improve customer service
Article Source: http://EzineArticles.com/?expert=Theodore_OlsonSource URL: http://ashesgarrett.blogspot.com/2006/09/why-your-oil-change-is-never-just-oil.html
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By Theodore Olson
For a repair shop, there is little profit in the $29.95 oil change. By the time a shop pays its technician, pays for the oil, the filter, and the hazardous waste disposal fees, theres no money left. This low profit margin is worsened by the extremely competitive Quick Lube business, which forces local repair shops to refrain from raising prices, despite rising costs.
This all begs the question: If oil change specials, which range from $15.95 to $29.95, clearly produce very low profits, then why do so many service facilities advertise oil change specials?
The answer is actually very simple: It gets you in the door. Service centers know that once they have your vehicle, they can sell you additional work.
Suggesting additional work is called upselling, and its a primary profit tactic of every service facility. Heres a typical example. You drop your vehicle off for, just an oil change. Upon completion your service representative smiles and proudly states, We noticed that your air filter was dirty; so we popped in a new one. You may think, great, what wonderful service!
What really occurred is that you were casually upsold an air filter. It probably wasnt needed; it
certainly wasnt replaced according to any factory recommendation, and you were definitely overcharged for what was most likely a poorly-fitting, aftermarket, inferior air filter.
Heres a real-life example that occurred recently. This particular vehicle had 54,000 miles on it, and was dropped off at a local shop for, just an oil change. Upon paying the bill, the customer was handed an estimate for $199 to replace his air filter and top radiator hose. Shocked at the price, he called me.
After review, I found that the air filter suggestion was premature. It didnt need replacement until the manufacturers recommended 60,000 mile service interval. The top hose was also premature. In fact, it did not need replacement at all, despite a very minor problem easily addressed during the factory maintenance schedule, at no extra cost.
Check out the aftermarket part prices quoted below (including the unnecessary radiator hose). Compare these to the manufacturers suggested retail price (MSRP) for the factory OEM parts (Original Equipment Manufacturer).
Local Shop Aftermarket Air Filter: $32
Manufacturer OEM Filter, MSRP: $17
Local Shop Aftermarket Top Hose: $36
Manufacturer OEM Top Hose, MSRP: $19
Notice that this local shop was doubling the price of the OEM parts with its inferior aftermarket parts.
Now, lets look at the labor time that was quoted.
Local Shop Labor Time: 2.0 @ $60 per hour = $120
Manufacturer Labor Time: 0.9 @ $60 per hour = $81
Notice that the shop labor time estimate for the repairs was 2 hours. This is more than twice
the manufacturers recommendations (even after calculating manufacturer times against the industry standard multiplier).
Had the local shop abided by the vehicles particular maintenance intervals instead of trying to make a quick buck, it should have recommended a 60,000-mile service at the next visit. This would have better served the client, saved him $199, and maintained the vehicle properly. Instead, they lost a client, forever!
What needs to be made crystal clear is that this type of price-gouging occurs every day in every type of service facility in one form or another across the automotive service industry.
This type of price-gouging is considered normal!
Theodore P. Olson (Ted)
Car Repair Help
Ted holds extensive certifications from Mercedes-Benz, Toyota, General Motors, ASE (Automotive Service Excellence) and more. Over a twenty-year period in the automotive service industry, he has served as a technician, shop foreman, shop manager, shop owner, service advisor, service manager, and service industry consultant.
Other Works by Ted Olson Include:
ARREST the Automotive Service Industry!
Maintenance Myths: A Step-by-Step Guide to STOP Getting Ripped Off!
Auto Repair: The Shocking Truth About Whos Ripping You Off and Why!
Automotive Service Pricing Strategies a fair pricing guide for service centers
Being the Best a comprehensive customer service handbook for service advisors
Service Center Personnel an auto repair informational for general service staff
Service Mission Statement a philosophical proposal to improve customer service
Article Source: http://EzineArticles.com/?expert=Theodore_OlsonSource URL: http://ashesgarrett.blogspot.com/2006/09/why-your-oil-change-is-never-just-oil.html
Visit ashes garrett for Daily Updated Hairstyles Collection
