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Auto Repair Labor Rate Per Hour

Auto Repair Labor Rate Per Hour

Auto repair labor rate per hour have significant differences across the country, and even in a single city. But just the same, with most auto repairs labor is typically the most pricey component. The longer a technician takes to repair a part, the more you will pay. On many late-model vehicles, accessibility (or the lack thereof) is a major concern. It can be complicated and time-consuming to fix certain pieces. Most repair shops (depending on location) charge around $80 per hour for labor, while dealerships charge around $95-$125 per hour. As a result, another misconception has been debunked: dealerships are much more expensive than independent mechanics.

Auto Repairs Are EXPENSIVE

Why Auto Repair Labor Rate Per Hour is So High


Why are labor rates so high per hour? Since auto repair is often dirty, back-breaking work that involves extensive preparation, expertise, and experience. In addition, a large number of expensive tools and equipment are also needed. The typical technician has spent more than $14,000 on supplies, and the shop where he works could have thousands of dollars in service equipment.


In addition, a large portion of the hourly wage you pay goes to shop overhead, which include rent, equipment purchases, utilities, repairs, employee benefits, and so on) and profit (which every business needs to stay in business.

Auto Repair Labor Rate Per Hour Vs Flat Rate


Employees are paid for the amount of time they currently work in a shop that pays by the hour. If a work that was supposed to take an hour transforms into a 4-hour marathon, then the employee is compensated for all 4 hours. However, some repair shops could also charge by flat rate instead of auto repair labor rate per hour. Many repair facilities charge flat-rate fees for many, if not all, of their services. Mechanics who are paid a flat rate receive a portion of the fee.


If somebody is paid by the work completed rather than by the hour or by the salary, it is referred to as flat rate pay. This flat-rate structure encourages employees to complete as many jobs as they can, but it can also lead to sloppy work if workers choose quantity over quality.


When a work that was estimated to take one hour turns out to take three, the employee is still paid at the flat rate — the equivalent of one hour. If he finishes the job in less than 30 minutes, he will still be paid the full flat rate.


Your repair bill is normally based on a typical “flat rate” calculation. Many car owners are suspicious of mechanics who charge a “flat-rate” labor fee. This is where the various components of your car's repair are itemized line by line and the overall time is multiplied by a flat rate. 


But no worries, the truth is that according to research conducted by the American Automobile Association, mechanics use the flat rate to simplify the operation, and customers actually benefit as well.


Repair jobs are divided into three categories: year, make, and model, with times varying greatly from one vehicle to the next. The amount of time it takes to complete a task depends on how much other stuff needs to be removed to get to the component, the job's average complexity, if any special equipment or procedures are needed, the vehicle's age, and so on. There are actually specific car parts that are more pricier to repair.


When a car manufacturer or aftermarket manual publisher creates flat rate tables for different repair jobs on various cars, all of this is supposedly taken into account. The flat rate data is distributed in printed or electronic form, and car dealers and repair shops use it to prepare repair estimates. If a shop believes the published flat rate does not provide enough time to complete the job, they can add extra time to an estimate based on the vehicle's condition or previous repair work.


However, here is how the flat rate can be a disadvantage to you when charged instead of auto repair labor rate per hour. You still pay the flat rate even though the real time it takes to repair the car is LESS than the average flat rate time. What is the reason for this? Since life isn't always a level playing field. The shop makes more money on the job, and the technician who does the work is always rewarded for beating the flat rate (a good technician can almost always beat most flat rate times).


You can, in theory, just pay for the exact time it takes to repair your car and not one minute more or less. However, most dealerships and repair shops do not use this system for obvious reasons. A lot of shops also have a separate diagnostic fee which covers the length of time it took to connect the scan tool into your car to read fault codes.


The auto repair labor rate per hour for diagnosis of the issue usually averages from $75 to $100 or more. If the shop performs the repairs, the expense of the diagnosis can be discounted or deducted from the overall bill.


The cost of parts to repair your car is determined by where the parts are purchased and how much they are marked up. When you have a repair shop install parts for you, you usually pay the full retail price. The average markup is 30 to 40%, but certain parts may have a lower markup depending on the discount the shop receives from their supplier or distributor. 


While you could probably save some money by shopping around yourself and buying the parts you will have to face the fact that most shops will not be installing parts that they did not acquire themselves. Most shops have preferred brands to also secure their standard and will only install parts from reputable suppliers. While that low-cost alternator from China might be $50 less expensive than the brand-name OEM alternator, it is unlikely to last as long.


Aftermarket components are, on average, less costly than OEM parts. However, since the standard can differ, stick with brand name aftermarket parts. In certain cases, the aftermarket parts vendor is also the OEM parts vendor, and the parts are almost identical.


How Do You Calculate Auto Repair Labor Rate Per Hour


Most repair shops charge between $80 to $100 auto repair labor rate per hour while dealerships charge you between $95 to $125 per hour. If ever you are fortunate enough to find a trusted repair shop that gets the job done and provides excellent service, then you should not be worried, thinking you are being ripped-off. Be happy instead and pay what is due to them.  


But how do you calculate auto repair labor rate per hour? You don’t want to be leaving the repair shop scratching your head, doubtful and full of questions. To calculate the auto repair labor rate per hour, you need to know the labor rate formula. The formula is the employee’s hourly wage,  hourly cost of taxes and the hourly cost of the employee’s fringe benefits. Basically it could be calculated this way; labor rate = wage + taxes + benefits. 


If you still worry about being overcharged for your car repairs including the auto repair labor rate per hour, you can look at the charges on the repair estimate of the car or the car repair invoice to know what you are paying. While there is so much information and tips online on how you can avoid being overcharged, there are only a few that talk about the actual auto repair cost or prices. 


Instead of worrying about getting ripped-off or paying too much on car repairs, it will be better if we focus on whether the charges are legitimate and if the cost is justified. Car repair estimates can be too complex to understand. Let's break it down and go through each of them to help you understand and know if you are being charged appropriately by your auto shop repair. 


To start, you have to be familiar with the six basic parts to a car repair estimate. You can search for a car repair estimate template online if you haven’t seen one yet. It includes the customer and vehicle information, auto parts, labor, miscellaneous charges, flat fees, and summary of charges. 

  • Customer and vehicle information.


The car repair estimate usually uses the generic top down style format. Its top portion will consist of your personal information as well as the specifics of your car like the year, model, make, mileage, and other information. It might also include the car’s issue or your request. 


  • Auto parts. 


The next part will be the auto parts. The auto parts will be listed with a short description, quantity and the price. Like mentioned above, there are several types of auto parts – OEM, aftermarket parts, and the used parts or second-hand parts. 


The OEM parts are the parts made by or for a manufacturer and usually installed by a dealer. There are many local shops that also use and install OEM parts. The aftermarket parts on the other hand are non OEM parts that have different degrees of quality. The quality usually depends on the brand, the price, and where they are made. Then there are the used parts. They are parts purchased and taken from junk cars in the salvage yards. 


You need to ask what type of parts are being used or installed in your car so you can determine if you paid too much for it. If OEM parts are used, you should not pay more than the Manufacturer's Suggested Retail Price or MSRP. There are people who pay more than the MSRP without them knowing. The same can be said for the premium aftermarket parts. Do not pay more than the MSRP. As for the used car parts, their prices can vary. Used parts that are too cheap can be questionable and you don’t want to pay for expensive used parts either. It is better that you pick the part priced in the middle. 

  • Auto repair labor. 


The labor times or the amount of hours it will take to fix your car are based on established industry guidelines. If you notice that there is no auto repair labor rate per hour posted on the car repair invoice, you need to ask the rate from your service center. You need to get the rate since auto repair shops can manipulate the labor rate with the labor matrix. Knowing the repair labor rate is very important to determine whether you have been overcharged or not. When you check your car repair invoice, the labor will be billed in tenths. Meaning, 1.0 is 1 hour while 1.5 is an hour and thirty minutes. You would want to multiply the billed number of hours by the labor rate of the shop. 

  • Miscellaneous charges. 


Miscellaneous charges can include fees for the shop supplies like the chemicals, rags, hazardous waste, or disposal fees. The miscellaneous charges should be computed off the amount of labor hours charged and not the amount of the miscellaneous items used. 


  • Flat fees. 


Services that don’t get broken down into parts like tax and labor are flat fees. Flat fees can be a little tricky since you don't really know the real and fair price for it. However, flat fees are known to be competitively priced. 

  • Summary of charges. 


At the bottom right part of the auto repair estimate, you will find the summary of charges. You might want to check it and calculate it against the charges listed above to determine that it all adds up correctly. 


Auto Repair Labor Rate Per Hour: Final Word


Knowing the auto repair labor rate per hour can help you understand the actual cost of your car repairs. You need to ask the right questions and know the break down of your car’s repair costs to ensure that you are paying the actual and fair price for the job done.