Archive for March, 2016

Race To The Bottom

Friday, March 11th, 2016

Should you pay for diagnosis when a shop fixes your car?

By Chris Dekker

 

Over the years, we’ve been lucky enough to secure fleet maintenance contracts with many small, and several large companies. This month, I had a chance to earn the business of another commercial client, but lost that chance over my unwillingness to compromise on one thing: charging for diagnostics. The customer felt that they shouldn’t have to pay for time spent diagnosing an issue if they went ahead and repaired that issue with us; a commonly-held belief among some car owners. I had to explain that giving away diagnostics may have been common many years ago, but is an antiquated business model that no longer works today. For a modern auto service business, it’s a race to the bottom.

Why is this? Years ago, cars were simpler; and all very similar. Diagnosing problems required fewer (or no) expensive special tools, and took less time. Repairing these vehicles was also simpler, and more profitable. For a repair shop owner, it made sense to give away a quick, cheap diagnosis if it meant gaining a lucrative repair.

Today, things are very different. Diagnosis is complicated, and expensive. Vehicle quality is much better, and vehicles break down less. Many of the most profitable repairs are gone, and vehicles usually require far fewer parts replaced over their lifetime. Many repairs now involve replacing no parts at all!

 

Examining today’s diagnostics:

Performing diagnostics and software programming work at the highest level requires a very substantial investment in scan tools; service information; and technician training. That last part, regarding our technicians, is important. Technicians who are capable of quickly and accurately troubleshooting today’s vehicles are hard to find, and therefore command a higher wage; adding to the cost of the diagnosis. As we’ve discussed before, it’s very early in the diagnostic process that the scan tool is of no further help and the human brain must take over, so good technicians are a very important piece of the puzzle.

While we hope to add more tooling and capability in the years to come, we already own tens of thousands of dollars in scan tools (dealership/factory tools, and aftermarket or “multi-vehicle” ones), which each require thousands of dollars in software updates each year. Purchasing genuine service information and specifications from each vehicle manufacturer costs thousands more. We estimate that the cost of offering full, dealership-level capability on just the “big three” domestic manufacturers’ vehicles is about $23,000 per year at today’s exchange rates, before factoring in wage costs or any of our other normal operating costs.

Diagnosing issues on today’s vehicles not only costs more; it often takes longer, too. While the first fuel-injected cars of the 1990s had one on-board computer, modern vehicles have 20 or more, and they communicate with each other over high-speed data networks. The wiring diagrams detailing every electrical circuit on a vehicle can now span dozens of pages. The carbureted vehicles of yesteryear could be contained to 3 or 4.

airdrie car diagnosis

Here we are using an oscilloscope to determine if an engine’s valves and fuel injectors are opening at the right time. Checking this kind of thing used to require hours of mechanical diassembly, but not any more!

airdrie mechanics

This is a “known good” waveform from our one of our information resources, which we can compare with.

For those willing to embrace the technology and challenges that newer vehicles bring, our job can be very satisfying, though! Being able to provide an accurate diagnosis only gets more important every year, as parts continue to get more expensive. “Throwing parts at a problem” never was a good idea, but is an especially bad one today. The cost of installing one part that doesn’t fix the problem could easily pay for a good diagnosis by a qualified technician.

 

Examining today’s repairs:

Auto repair today is less profitable than in decades past, as cars continue to get better.  A lot of the “easy money” is gone, as vehicles need fewer hard parts replaced. Many ball joints, tie rod ends, and other steering components now outlast the vehicle. Exhaust systems are all stainless steel and rarely need replacing. Spark plugs last for 160,000 km instead of 40,000. Antifreeze needs replacing every five years instead of two. Gasket and seal technology has come so far that even leak repairs are much less common today.

Repairs have become more complicated, too. Granted, our trade still involves lots of nuts, bolts and grease; but electronics are creeping into everything we do. On some cars, even the brakes can’t be replaced without a specific scan tool: the electronic brake calipers must first be commanded to retract so the new pads can be fitted.

airdrie brake mechanics

Here’s an example of a brake caliper with an electric parking brake motor inside it.

Many repairs today involve replacing no parts at all! More and more issues can be rectified with software updates and changes. One really cool example of this, which I always share with people, involves a BMW with wind noise from the sunroof at highway speeds. BMW released a software update to fix this! They changed the sunroof control unit’s calibration so that when the driver pushed the automatic close button, it would run the sunroof motor for a split-second longer, sucking the glass into the weatherstripping a little more tightly.

Today we regularly fix hard transmission shifting, electrical issues, and even engine noises with software changes. It’s easy to see how the line between diagnosis and repair becomes blurred, as one of the first steps in a good diagnosis is making sure the vehicle has the latest available software calibrations installed; a process which will sometimes fix the issue by itself. Other issues may also be repaired indirectly as part of the diagnosis, such as bad electrical connections; blown fuses; or corroded grounds.

 

Hopefully this helps to demonstrate why the cost of a good diagnosis is a necessary, and valuable expense.  Thinking of having us diagnose a vehicle problem for you? Here’s how the process works in our business:

  1.  We’ll gather as much information from you as we can, regarding what your problem is; when it happens; etc. We may sometimes ask to go for a drive with you, so you can show us what’s going on.
  2. We’ll ask you to pre-authorize a certain amount of diagnostic time. Most of our diagnostics is billed at a rate of $150 per hour. Most warning lights and simple problems are diagnosed within an hour, with 96% of issues being diagnosed within two.
  3. If we haven’t come to a diagnosis within the time you have authorized, we’ll contact you with an update on what we have done so far, and a request to authorize more time. We’ll let you know what we have already tested; what tests we’d like to perform next; and how close we think we are to having your answer.
  4. We’ll never “throw parts at your vehicle” as part of a diagnosis. Once we have informed you what needs fixing, and we finally perform the repair, it will be the repair that fixes your problem – guaranteed. If we tell you that you need a certain part replaced to correct your issue, and the new part doesn’t fix the problem, then you don’t pay for that repair. It’s just how we run our business.

 

On a side note, we welcomed our 5000th customer to our shop today! We would like to thank everyone who has chosen us for their auto repair needs over the past years. Our business has grown like crazy through word-of-mouth referrals over the last two years, and our team has grown to eight great people. It is your business that makes it possible for us to do a job we love, every day!

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