Most people are aware of the glaring auto repair pricing abuses: service centers overcharging $100’s even $1000’s for repairs, or charging for service that was never done at all. However, there are many tactics which involve flying just low enough to avoid detection.
Savvy repair shops increase the price just enough so as not to set off any alarms. It’s become so common that it’s not just an accepted industry practice, but even service customers have accepted paying higher prices.
Knowing how ingrained price-gouging is within the automotive service industry, it’s shocking (although understandable) that even service customers have succumbed to higher car repair prices. I frequently hear repair customers’ state:
“Yeah, I know I was ripped-off, but my car’s fixed now.” Or, “I know they charge too much, but they’re convenient.”
To accept higher car repair prices is to allow its continuation. The difficult part, of course, is how to stop it. Given that the automotive service industry is so big and powerful (and so complicated) how does one battle such a force?
Perhaps the first thing to understand is the degree to which this type of stealth-like overcharging occurs. A two-decade undercover investigation reveals that 98% of all repair shops (dealerships, local shops, and franchises) are overcharging their customers in one form or another.
The following exchange, between a service manager and service advisor, provides an idea of the scope of what’s happening below the radar.
A service advisor asked his manager how to bill more hours per month, which is another way of asking how the advisor can make more money. The service manager casually stated:
“Simply add an additional two tenths to every ticket you write.”
In other words, every customer the service advisor “helps,” he was instructed by a superior to add a little extra. So if the labor rate is $100 per hour that would equal $120 for the client.
$20 doesn’t sound like much. However, whether it’s an overcharge of $0.02 or $20, it’s too much. If you visit a shop practicing just this strategy alone (there are hundreds of strategies, many applied simultaneously), you may end up getting overcharged $100’s by year’s end.
What’s really shocking is that being ripped-off by $100’s over a year’s time is minor. It’s the $500-$5000 range that should scare the pants off us. We wrote our eBooks to address all this.