Archive for May, 2016

What are “Labour Times”?

Sunday, May 29th, 2016

Insight into how an automotive repair business comes up with the price you pay.

honest mechanic calgary

By Chris Dekker

 

So, you call up an auto repair shop, looking for a price on a given repair. The person answering the phone might tell you that the repair in question is a “4.7 hour repair”; or a “2 hour job”. Where do these numbers come from? Read on…

An automotive repair business such as ours needs a way to price out repairs with consistency. As an example, we don’t want to charge one 2010 Chevy Malibu owner one price for a tune-up, and then charge the next 2010 Malibu owner a completely different price! Also, because we service hundreds of different vehicle models, each with hundreds of replaceable parts, there’s a good chance we might be quoting a specific repair that we’ve never done before. We need a way to determine roughly how long that repair will take. This is where labour guides come in.

A labour guide is a program or document that lists all of the common repairs, adjustments and maintenance services for a vehicle, with an estimated time of how long each repair will take. Companies that develop these guides come up with these labour times a variety of different ways. Some will have multiple technicians perform a repair – often repeatedly – and select an average time, or the fastest time from that group. Many of the labour times also come from the vehicle manufacturers themselves. We mostly use the Mitchell labour guide, a sort of “industry standard” that most auto repair facilities use, when estimating the cost of repairs.

For example, let’s take that 2010 Chevy Malibu. The published labour time (from the Mitchell labour guide) to replace the water pump is listed as 1.6 hours for the V6 engine, but 4.0 hours for the 4 cylinder engine! That’s good information to know when pricing out a repair. Of course, the guide is just that: a guide; not a “labour rule book” or “labour law”. All businesses are free to interpret the labour times however they wish. Some businesses lure in customers with a low advertised labour rate, but then “inflate” their labour times to make up the difference. Other businesses may charge lower labour times in an effort to stay competitive, and others may increase the times to boost profit a little. One must also remember that these labour times are determined when a vehicle is brand new. Many repairs take longer as a vehicle ages: bolts rust and are prone to breaking; plastic becomes brittle; electrical connectors become filled with dirt and hard to disconnect; etc. One broken bolt in a tough spot can turn what is supposed to be a 1 hour job into a 5 hour disaster!

We typically follow the labour guide quite faithfully, but apply a formula that reduces the labour times for some repairs on newer vehicles, and adds to the labour time as vehicles age, to make up for the issues noted above. We’re very committed to honoring our estimated price, though, and will often end up “eating” extra time when things go wrong, like an inadvertent broken bolt. We don’t have to – and can’t always – do this, but we do our best to help our customers out as much as possible.

Here’s something you might not know about labour timesThere is a widespread public belief that most published labour times are excessive or biased, and designed to bring auto repair shops extra money. The truth is that the system actually favours the customer, by a factor of about 20 percent. How so? Let me explain. One of the numbers that every auto service business owner/manager looks at is productivity. Productivity is the ratio of billable hours of work a technician can complete, vs the number of hours the technician actually works. Once you calculate this for each technician, you can then average the numbers and figure out the productivity level of the entire shop. What kind of numbers are most businesses seeing? You might be surprised by the answer.

The average independent auto repair business such as hours, employing hourly-paid (not commission-paid, such as in a dealership or “chain store”) technicians is shooting for an average productivity of 80 percent. This means that if a technician works an 8 hour shift, they will complete 6.4 hours of billable work. And this is just the goal! But the Automotive Industries Association of Canada reports that in most years this goal is achieved on average, or at least almost achieved.

Why just 80 percent? There are a bunch of reasons why 100% productivity can be hard to achieve:

  1. Doing a job well, and doing all of the little things right, often takes time. A technician who puts a lot of pride into their work will usually take longer than a sloppy technician who is in a hurry.
  2. In an independent business such as ours, which services most vehicle makes and models, we do a wide variety of repairs. This sometimes prevents us from getting the repetition that breeds speed. You can imagine how your second time doing a given repair will usually be quicker than your first; and your 10th time even faster yet! The labour times are often based on a technician who has done that given repair over and over.
  3. Technicians sometimes spend a lot of time doing things that the labour guide does not account for, like test driving a vehicle to make sure the customer’s problem is gone; or thoroughly cleaning the underside of a car following a leak repair; etc.
  4. Sh*t happens. Bolts break, or can’t be removed. Parts sometimes do not fit correctly. The wrong parts might show up. Customers sometimes show up late for an appointment, or do not show up at all. There are all kinds of things that can throw a wrench (no pun intended) into a perfectly-planned schedule.

Someone might tell you that they were charged 2 hours labour for a repair that only took a technician an hour and a half, and they wouldn’t be lying. But odds are that sometime in that person’s recent auto repair history, they were also charged 2 hours labour for a repair that took 3 hours to complete. The difference always comes out in the wash; and usually ends up slightly favouring the customer at the end of the day.

Sometime else to consider when discussing labour times is labour overlap between related jobs. Let’s use the Chevy Malibu water pump repair as an example. The V6 water pump is listed at 1.6 hours. Let’s say the car also needs a new serpentine belt tensioner, which is listed at 0.8 hours. If we’re doing both repairs together, should we charge the sum of the labour times, or 2.4 hours? We don’t think so; because there is labour overlap between these jobs. In order to replace either part, the serpentine belt and several other parts common to each repair must be removed, so there is a labour savings when doing the repairs together. In a case like this one, we would likely quote the water pump repair at the original 1.6 hours, and then the belt tensioner as a combination repair at 0.3 hours or so. Not every business does their pricing thing way, but we feel it’s the right thing to do, and part of what sets us apart in the industry.

 

Hopefully this gives you some insight into how we run our business every day. Do you have any questions about labour times, or any part of the pricing process? Please shoot us an email using the contact link above; call us; or message us on Facebook! We’d be happy to share any information we can.

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Are you being sold a “wallet flush”? Examining maintenance schedules!

Monday, May 9th, 2016

By Chris Dekker

A transmission fluid flush on a vehicle with 36,000 km. A brake fluid flush once every year. A coolant flush on a two year old vehicle. Do you really need this stuff?

Most people know that maintaining their vehicle is important. Over a vehicle’s life it will need fluid changes; filter replacements; various adjustments and more. But when should you perform these services? The answer is usually no further away than your owner’s manual. All vehicle manufacturers (automakers) release recommended service schedules that, when followed correctly, will provide all of the protection your vehicle needs. They usually list a normal maintenance schedule, and a severe service schedule. Most Canadian vehicles fall under the latter, in part because of the extreme temperature ranges that our vehicles see.

Here’s a problem we have with our industry: You’d think that if any service shop was going to follow the maintenance schedule as recommended by a given manufacturer, it would be a dealership representing that brand. Unfortunately, as we’ve experienced more and more recently, this couldn’t be further from the truth; and it’s making our whole industry look bad.

We have lots of customers with near-new vehicles, many of whom service these vehicles at the dealership of purchase because of “free oil change” programs, or other incentives that were thrown in when they bought the car. Lately we’ve received phone calls from some of them, concerned that the dealerships were trying to sell them maintenance services that they didn’t yet need; like the examples at the start of this column. We checked the vehicle manufacturers’ severe service schedules for these customers, and found that most of the services recommended were not yet required. Take the owner of the 2013 Ram 1500, for example. He was being sold a transmission fluid change at 35,000 km, but Chrysler Canada does not recommend one until 96,000 km; almost three times his current mileage! This kind of excessive maintenance has been jokingly coined the “wallet flush” by some in our industry, since a lighter pocketbook is really the only benefit a customer is receiving.

So, what’s going on? Instead of following the recommendations laid out by the folks that built your vehicle, these dealerships have cooked up their own in-house service schedules, sometimes printed on very official-looking paperwork complete with the automaker’s logo. These schedules are usually much more aggressive than the factory schedule, often recommending services years before the manufacturer actually does.

Some dealerships, like a local Hyundai dealership that a customer called us from last week, stoop so low as to tell customers that their warranties will be void if they don’t follow the in-house schedule. This is, of course, completely false. No wonder our industry gets a bad name, and some people don’t trust us.

airdrie honest mechanics

Here is a screenshot from one of our service information programs, where we are browsing the factory maintenance schedule of a 2013 Ram 1500. Circled are the items that should be attended to around 100,000 km.

Now, it’s worth mentioning that this problem isn’t confined just to dealerships. And in some ways, making up your own maintenance schedule isn’t wrong – as long as you do it honestly, and fairly. We can think of a few examples of where the manufacturers’ recommendations aren’t enough – like late model Ford trucks, who don’t require a differential fluid change until 240,000 km. The only problem with that number is that the differentials often fail and require a full overhaul by 150,000 km, if the fluid is not changed. But these are rare examples, and many of the in-house service schedules we’ve looked at lately are – in my opinion – fraught with greed.

Don’t be mistaken; vehicle maintenance is very important – and many vehicles on the road are not being properly maintained. Many businesses have just lost sight of the fact that looking after the customer who owns the vehicle – and looking after their budget – is just as important as looking after the car itself.

I use the words many businesses because there are still lots of honest auto service businesses out there. We know of several great shops, just in Airdrie alone, who are genuinely looking after their customers’ best interests. Of course, we’d like to include our own business in that group. Since starting our company almost three years ago, we’ve been able to make a real, positive impact in the local auto service world. Customers seem refreshed by the type of honest, low-pressure environment we run.

So we’re not telling you to stop maintaining your vehicle, just to be careful about when you have certain services done, and who you choose to perform those services. If a service recommendation sounds a little off to you, get a second opinion from another business. If you’re ever wondering about when a certain service should be performed on your vehicle, just give us a call. We’d be happy to look up your manufacturer’s recommendations, and happy to help – whether or not you choose to do the work with us!