We’ve all seen it, from one side of the counter or another. The consumer receives a call with a report on repairs his car needs. The service adviser carefully explains that the flux capacitor has fused with the transmutator. It’s terminal and must be done to the tune of $1895 plus taxes Mr. Smith. The good news is that we have the parts in stock and you can pick the car up at 5. It is now 3:30.
Upon arrival, Mr. Smith looks at the invoice and the repair indeed cost $1895 plus taxes. The trouble is that there is 4 hours labour included in that $1895. This is when Mr. Smith goes off his nut. “How can you charge me 4 hours, when you only called with an estimate an hour and a half ago?”
The service adviser explains that the first hour was diagnosis. That leaves 3 hours. Done in an hour and a half. “Well Sir, this is a flat rate shop & that’s how it is.”
Not much of an explanation.
First off, let me explain how the flat rate system works. At least in theory. The idea is that a flat rate time is set for most repairs that could be performed on a vehicle by an average mechanic with average tools. Say for example that the flat rate time to replace a flux capacitor is 2 hours. Technician A has 2 years experience and is working with standard tools. It takes him about 2 hours to replace that flux capacitor. Technician B has been in the trade for 12 years. Not only has he learned all sorts of little time saving tricks, but he’s got the latest flux capacitor removal tool that cost him $1000. Technician B replaces that same flux capacitor in under an hour. He still gets paid 2 full hours. Why? Because he is being paid for his years of experience and personal investment. Mr. Smith obviously had Technician B working on his car, otherwise he would still be in the shop at 6:30 waiting for his car.
At the other end of the spectrum is Technician C. Technician C may be a new guy who is still learning, or he may be an old guy who just plods along at his own pace, with no interest in rushing. Technician C replaces that flux capacitor in 3 hours. Just like Technician B though, C still only gets paid 2 hours.
In many cases, the flat rate shop that has experienced technicians with up to date training and tools will come out on top, but that is not always the case.
So where do these times come from? There are several industry accepted publications that put out labour Time Guides that are updated annually, which outline the times for most jobs. In most cases, shops will adhere to these times as it keeps their pricing in line with the competition.
The flat rate system isn’t perfect, but it at least provides a standard that shops and consumers alike can live with.