Date: Fri, 16 Sep 2005 10:09:32 -0500
Reply-To: Bruce Nadig <motorbruce@HOTMAIL.COM>
Sender: Vanagon Mailing List <vanagon@gerry.vanagon.com>
From: Bruce Nadig <motorbruce@HOTMAIL.COM>
Subject: Re: NVC: "Book Rate" vs Actual Time
Content-Type: text/plain; format=flowed
Book Rate and Hourly Labor Charges can be manipulated in many different
ways.
I have worked in both the automotive and motorcycle repair industries. I
have worked at motorcycle dealerships, car dealerships, and independent
repair shops.
I have seen flat rate used in some interesting ways, and for the most part,
they are usually fair. Many times, dealerships (and often independent repair
shops) will use flat rates that are provided by the car/motorcycle
manufacturer. All of these times were developed by the manufacturer to
determine how much the manufacturer will pay the dealership for warranty
work. The result? Quite often the flat rate provided by a manufacturer will
be difficult to meet or beat. Why? That way the manufacturer will be paying
the dealerships as little as possible on warranty work. It is in their best
interest to do so.
The dealerships know this. So, it is not uncommon for the dealerships to
multiply the manufacturer's flat rate for customer pay work. For example, if
a given job is listed as 2.0 hours by the manufacturer, the shop may use a
multiplying factor - typically anywhere from 1.1 to 1.5. So that same one
hour flat rate would be 2.0 hours x 1.25 = 2.50 hours charged to the
customer.
Is this fair? From my experience, yes. There are two primary reasons for
this. First, as indicated above, the manufacturer's flat rate may be hard to
meet. Second, the flat rates were developed using a pristine vehicle with no
modifications, no dirt or grime, no frozen bolts or fasteners, etc. It is
just a fact that older cars/motorcycles will take more time to work on.
Finally, a minimum shop charge, typically 0.5 hours, is quite fair. I have
seen jobs that are listed as taking 0.1 or 0.2 hours (6 or 12 minutes). Even
for the most simple jobs, it is difficult for a mechanic to get a ticket for
a job, pull the vehicle into the shop, diagnose the problem (is the bulb
burned out, or is the fuse bad?), get the parts necessary for the repair, do
the repair, test drive the vehicle, complete his portion of the paperwork,
do a quick and basic safety inspection on the vehicle, and remove the
vehicle from the shop.
I always made all of my mechanics complete a check sheet for EVERY job. Tire
pressure was to be checked, all lights and signals were checked, etc. Even
if the car had been in the shop just the day before, I always had the
mechanic check all of these things and perform a test drive to make sure the
vehicle was safe.
I hope that this helps all of you understand the billing process a bit
better.
Cheers,
Bruce
motorbruce@hotmail.com
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