also makes it easier for the dealer or repair shop to give the customer an accurate estimate of the cost for the job , before the customer agrees to have the job done .
It works well for the mechanic as well . The better the mechanic’s knowledge of the work is , the more work he or she is able to complete , for each pay period , and therefore the more money they will earn . It pays the mechanic to learn the trade well , as the better they get at the work , the higher the wages they can earn . Also good mechanic’s have many customers who request to have “their” mechanic to work on their vehicle . This good reputation can give the good mechanic work to do when other mechanic’s are slow .
Shop expenses such as , the cost of the building and the premises , parking lot , driveway , lawn , etc , must all be paid by the labor costs . The cost to maintain the building and the premises inside and out side the building , janitorial and grounds keeping etc , must be paid .
The cost of the equipment such as , jacks , axle stands , hoists , air compressors , air hoses , brake lathes , analizers , alignment racks , presses , torches , welders , Benches , vises , etc , and the cost to maintain all this equipment must be covered .
Shop specialty tool such as head light aligners , spring compressors , and many others must be covered .
Specialty tools can cost a dealer $50,000.oo or more each year .
Repair manuals and labor manuals must be bough every year . A dealer may spend $15,000.oo or more each year for these .
Cleaning materials and equipment such as floor soap , brooms , towel and hand soap must be covered .
And then there is heat and hydro , used oil disposal fees , old tire disposal fees , and garbage disposal fees , are just some of the other expenses to be paid .
The wages for manages , service writers , and office staff and their supplies and equipment , must also be covered by labor costs .
Insurance for customers , employees , vehicles and all that is on the premises , must be covered .
Labor costs must also cover the Warranties on repairs done .
Smaller shops have two main sources of income . Labor charges and a percentage of the parts sold . These shops get a discount on the parts of normally 20% to 30 % , which gives the shop a small profit on the part , while the customer still pays the same price for the parts as they would cost at the parts store . This small parts profit can help to keep the labor costs lower .
Dealers have three main sources of income . Labor charges , a percentage of the parts sold and the profits from the new and used vehicles sold . In a dealer if the profits from the labor charges and the profits from parts sold , covers over 80% of the cost of wages and expenses of operation , the business will likely be considered to be successful .
If labor costs were based on the time it takes to do the job , you could be paying more money to have someone less experienced and knowledge to do a job , than you would pay for the job to be done by someone well experienced and with greater knowledge .
Flat rate erases the possibility of the above , happening and should also give the mechanic more incentive to learn the trade well . The more you know about the job you are doing the less time it takes you to do it right , and there for the better the pay cheques .
The Disadvantages of “flat rate” are ,
(1) the mechanic does not make any money when there is no work to do . This may lead to some mechanics trying to sell you work before it is really needed .
(2) some shops may hire more mechanics than the really need , because they only have to pay the mechanics for work done . This may also lead to some mechanics recommending work before it is really due .
Lower labor rates may “
