Online Journalist Tackles Question of ‘Why Does My Car Repair Cost So Much?’

Tom Torbjornsen, maintenance editor for AOL Autos, has readers ask him all the time about how the price of an auto repair is determined. In this article, Torbjornsen covers the three main criteria used in pricing a repair – labor rate, cost of parts and shop overhead.

Below is the article as it appeared on the AOL Autos website.

Why Does My Car Repair Cost So Much?
Understanding What Goes Into An Estimate

Posted: Feb 15, 2011

By Tom Torbjornsen
Maintenance Editor, AOL Autos

Getty Images

People ask me all the time how the price of an auto repair is determined, usually phrased something like, "Why does my car repair cost so much?" This is a question worth asking, especially if you’ve been given a repair quote that runs into the hundreds or even thousands of dollars.

There are three main criteria used in pricing any given auto repair. The first is the labor rate, or what the shop charges for the time and expertise that goes into repairing your vehicle. The second is for the parts themselves, and whatever other shop support materials are used in the process of the repair. The third area to consider are the fixed costs or overhead that the repair shop has to cover, but that doesn’t get reflected on your bill.

Understanding Labor Charges
When you see a line item for "labor" on your repair estimate or bill, there are two factors that go into it. The first is the shop’s own per-hour labor rate. The second is "book time."

A shop’s labor rate is the hourly rate it charges for work. The term "book time" refers to the average amount of time it takes to perform a particular automotive repair or maintenance job. This is a number that’s set based on how long it takes a factory mechanic (or "technician," as is the common industry parlance) to do the job, but with a modifier applied in order to establish a more realistic time that a less trained technician might take. It’s the automotive tech’s responsibility to complete the job within that "book time" window, though sometimes repairs take longer or can be performed quicker.

Shop labor rates vary with the geographic area of the country and are competitive within a particular area. Labor rates typically run $80-$150 per hour nationwide.

To read the entire article on the AOL Autos website, visit http://autos.aol.com/article/car-repair-cost/.

When Your Shop Is Worth Much More Than You Thought

Although every sale of a shop in which I am involved has its own unique set of circumstances, which makes my job both very interesting and very challenging, Cowden Automotive stands out as particularly memorable because I was able to demonstrate to the long-time owner, Paul Cowden, that his business was worth about three times what he had initially thought.

Case Study: Owner of San Francisco-based Import Service Shop Delighted to Discover Just How Valuable His Business is to Qualified Buyers
I sometimes share case studies of the clients I have been able to assist in my role as an aftermarket business broker and provider of intermediary and advisory services. I do that when I think the story will provide a reader in similar circumstances with new insights or helpful information.
In the case of Cowden Automotive, Inc., I acted in a consulting capacity assisting the owner and his broker in valuing the business, creating a marketing plan, finding a qualified buyer, and arranging financing for the sale.
Although every sale of a shop in which I am involved has its own unique set of circumstances, which makes my job both very interesting and very challenging, Cowden Automotive stands out as particularly memorable because I was able to demonstrate to the long-time owner, Paul Cowden, that his business was worth about three times what he had initially thought.
Needless to say, delivering that kind of good news to a shop owner is a rewarding experience. Discovering that the sale of his business would result in his retirement nest-egg being substantially larger than he had ever thought was a fitting tribute to someone who had spent his entire working career as a busy automotive service shop owner.

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