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OTHER ITA SITES:
Car Repair Prices: Why Your Oil Change Is Never �Just An Oil Change�
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, there�s 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 it�s a primary profit tactic of every service facility.
Here�s 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 wasn�t needed; it certainly wasn�t replaced according to any factory recommendation, and you were definitely overcharged for what was most likely a poorly-fitting, aftermarket, inferior air filter.
Here�s 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 didn�t need replacement until the manufacturer�s 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 manufacturer�s 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, let�s look at the labor time 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 manufacturer�s recommendations (even after calculating manufacturer times against the industry standard multiplier).
Had the local shop abided by the vehicle�s 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, the service center lost a customer, 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!
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