Are Most Repair Shops Flat Rate
Troubleshooter: Should you care about how your mechanic is paid?
Knowing shop rates and how they're calculated can make you a smarter customer
When you look at a repair invoice from your service garage, do you ever think of how labour fees are calculated, or how they relate to the technician's pay? Does it make any difference as long as it's within the estimate's limits? The answer to the last question is a definite yes — shop rates and pay plans do make a difference, and knowing how things are calculated can make you a smarter consumer.
Not long ago, technician pay plans were divided into two categories: flat rate and straight time. Flat rate is a system where customers are charged and techs are paid by the job, not by the time spent doing them. Shops using this system — and most do — will tell you they use a recognized industry guide that has a time rating for just about every repair you can do on every type of vehicle in the country. You can take that statement with a grain of salt, because there are lots of amendments done by a lot of shops on a daily basis.
The biggest customer complaint on this system occurs when they wait (and maybe watch) a repair for which they're charged 2.5 hours, which only took 1.5 hours to complete. This leads to inevitable questions of overcharging; service consultants will tell you the flat rate system protects both the customer and the shop by taking out the risk of surprise fees relating to broken or seized things inflating your final bill.
You can also take that with a grain of salt. Techs working on the flat rate system will usually earn about 25 per cent more than their actual time doing routine repairs in a busy shop. Anything less and their supervisors will be looking for answers, or maybe a new tech. The big reason for flat rate is it removes the need to constantly monitor employees' productivity, as their desire to earn more money tends to keep them efficient.
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Straight time shops pay their techs for the hours they attend work, much like the way most hourly employees in every other industry are compensated. Proponents of this system say it reduces the inequities in flat-rate shops where pay varies wildly, and it discourages techs from turning blind eyes to necessary repairs that aren't profitable from a flat-rate standpoint. When asked how shop managers keep production levels up, the answer is usually the same way any other business does it — proper management and supervision.
A third pay system, menu pricing, has been growing in popularity in a wide variety of shops within the last 15 years or so. This billing process sees parts and labour for common maintenance items listed as one price. Supporters of this pricing argue it makes it easier for consumers to price shop, but it can cause a lack of transparency for customers interested in the details, such as the prices and related quality of parts being used on their vehicles.
What's the take away of all this? First, the service or labour fees on your invoice really don't have much to do with the actual time a tech spends on the jobs. Those charges also take into account the infrastructure we all take for granted — shop equipment, specialized tools and training, etc. Second, if you're vehicle is dealing with an intermittent problem requiring some tech patience and extra time, a straight-time shop might be better than a flat-rate one. This also might explain the 'no fault found' notations on your repair documents.
Knowing the flat-rate system might give you some ammunition when faced with extra fees due to seized and rusted components — after all, that system is supposed to protect you, the consumer, against such surprises. You're likely won't convince a shop operator to change their fee system just for you, but knowing a little bit about the various systems makes finding the best deal a little easier.
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Are Most Repair Shops Flat Rate
Source: https://driving.ca/column/troubleshooter/troubleshooter-should-you-care-about-how-your-mechanic-is-paid
Posted by: reynayage1950.blogspot.com
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