Mark Giammalvo specializes in driveability diagnostics at his family business, Sam Giammalvo's Auto Sales & Service, Inc. in New Bedford, MA.
Mark, who has been with the business for
over 20 years, is an ASE
Master Technician and Parts Specialist. He also holds the ASE
L1 certification, and has an associates degree
in business management.
(Printed in the Journal
of The Alliance of Automotive Service Providers, AASP)
Personally, I can vouch for several of these typical costs as I've incurred some of them in the past several years. Stop and think about some of the items around your home that you have paid to repair in the last year or so. The scariest part about this comparison to automotive repairs is the ratio between the item's replacement cost to its repair cost. As you read on, you'll see that the ratio is skewed in the opposite direction. Theoretically, if a new middle line refrigerator costs approximately $1,800 and the average repair costs are approximately $150 to $375 then the repair ratio is approximately 8% to 21% of the refrigerator's value. Likewise, if a middle line washer machine costs $700 and the average repair costs $125 to $350 then that repair ratio is 18% to 50%. Although only examples, you can easily do the math on other appliances by looking up some of their average costs on retail web sites.
Now, if a middle line automobile costs $19,000 and the average front brake or exhaust replacement job costs $180 to $485 that's only to 1% to 2.5% of the car's value. Now, I've always thought automotive repair costs were very reasonable, but 1% to 3% of a car's value? Now I realize its not only reasonable, its down right cheap. How can a product with and engine, transmission, computers and modules be cheaper to repair than a much less costly appliance? The answer has a lot to do with what the automotive service industry perceives as "acceptable repair cost percentages". Most people inside the automotive industry are aware that the repair cost to replacement ratio is flip flopped but its just not something that can correct itself overnight. The motoring public still assumes that the average automotive service repair should equate to a very small portion of the car's value.
That being said, how and when will the repair/cost ratio change? Fact is, it is changing, albeit gradually. Auto dealerships are getting within a few dollars of the "three digit" hourly labor rate. Conscience shop owners and managers are starting to realize the true operational costs to operate a profitable and successful service department. These increased labor amounts have caused ripples of the dealer's customer base to flow back to the somewhat less expensive independent repair facilities. Unfortunately, for the automotive consumer, the relief is only temporary. Independent service facilities costs are increasing in the same proportion as in the dealership service departments.
Another item to mention is the high cost of servicing shop equipment. Recently our alignment machine locked up during a four-wheel alignment. The service technician from the alignment company had our machine repaired in just over an hour and they weren't bashful about charging. Road service was 79.00. Diagnostic time was billed at 89.00 per hour (higher than our current labor rate). The cables we needed were 72.00 each plus a freight charge. Including an upload of the latest software the bill totaled just over 450.00. All for a little over an hours work. That's either expensive or automobile service is really reasonable. I think the latter.
The end result here is to realize that automotive service has a dynamic value. There's a lot more sophistication in an automobile than there is in a refrigerator. The complexity of automobiles is truly amazing and the vehicle owners are becoming more aware of this. When you think about it, everything from voice command systems to rain activated wipers is truly remarkable technology. Problem is, all this technology is costly in time, training and equipment. The modern automotive shop owner is now required to purchase more expensive diagnostic tools. These tool costs must be included in the repair charges via a separate fee or a supplementary labor rate. Its no secret that the automotive service industry has been subsidizing customer repairs for decades. In those same years many shops gave away too much. Many of those shops are no longer in business. Some of those shop owners did not want to learn the new computerized technology. Other shop owners made an effort to learn but did not charge for the technology, be it in the specialized tools or diagnostic time. Only those shop owners that understand these costs will continue to serve their community and operate stable profitable operations. Automotive repair costs must be both competitive and profitable. Yet, competitive and profitable costs will only coexist when the shop owner understands his shop's true operational expenses.