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FLAT RATE - is it fair ?

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Rookie

10-24-2003 15:27:46




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Just a question or two about a flat rate in a repair shop. Let's say that a shop gives you a 4-hour estimate for some work you have to have done. They get that 4-hour time from some huge master repair manual that lists all the jobs for different tasks. Am I correct in assuming that they will charge you for 4 hours labor even if the work only takes the mechanic say 2 1/2 hours? Then, if by some chance something "comes up" during the repair (that took more time than the expected amount), you would pay the extra, let's say an extra hour for a 5 hour billing (instead of the 4 hour estimate). If this is so, it doesn't seem fair in my view. I don't mind the extra touch so much (if a problem arises) but paying for more time than they spent on it seems to be a bit of a rip off. I mean, how can a mechanic charge out 10 hours work when he only works 8 hours?

Another screwing a guy can get is when two repairs are done at the same time in the same area. In some repairs of this type I suspect we are paying for two disassemblies and two reassemblies, even though only one was done for the two repairs. Can any of you guys out there shed some light on this for me?

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Buzzman72

10-25-2003 07:08:15




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
I worked parts at auto dealerships for 20+ years, and we had to do the parts & labor quotes for most of the service advisors...so I have some experience with flat rate. First, as someone mentioned before, there's warranty rate and there's Chilton rate in the auto world...Chilton times are usually 30-50% more than warranty rate. So if you're quoted 2.2 hours, ASK if you're being given the warranty rate or the Chilton rate. Most dealerships don't mind telling you. One dealership where I worked based their policies on a $5000 a month consulting service, which was hired based on their promise to train service advisors to sell an average of 3.0 frh per repair order. The idea was to offer service packages, have standard repairs pre-quoted in handy manuals for the advisors, and to save the customer time in the figuring of the repair estimate. They required the dealer to use warranty rate, even on "customer-pay" (CP) jobs...and to cut the customer a break on the flat-rate whenever overlapping times were involved. Diagnosis time? Advisors were trained to try to sell 0.5 frh "inspect-and-report" service--which would be deducted from the total if the ensuing repair was OK'ed--unless a major disassembly was required for diagnosis. The flaw was, if the customer bought, say, 3.0 frh for a disassembly and diagnosis, that didn't usually include any reassembly time if they DIDN'T approve the repairs. But service dispatchers were trained to map out 10.3 frh's on the dispatch sheets to be sold per every 8 clock hours, to allow filling time waiting on parts, etc. on one job while working a second job in the technician's second service bay. So a couple of 0.3 frh oil changes that run to 0.5 actual, combined with a 3.0 frh job done in 2.1 actual (those brake rotors on the first job can turn while the oil is draining on the second job) pretty much evened out for the techs...most never made the targeted 10.3 frh in 8 clock hours, but most usually averaged 8.8 frh or better, most days.

So is flat rate fair? On the average, it is; in some isolated circumstances, NO. But it evens out. If the shop is honest with you, and the technicians are competent and helpful--the best techs often will come out and discuss the repairs afterwards with the customer, rather than risk having some of the information lost in translation by sometimes not-technically-minded service advisors (remember, the service advisor's primary job is to SELL; to the customer, he's selling repairs, while to the dealership, he's selling their available hours)--then stay with someone you trust. Occasionally, you might pay more, but the peace of mind in knowing that the job's being done right should make this a good trade-off.

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MarkB

10-25-2003 03:01:46




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
My issue with flat rate is that it encourages mechanics to do slipshod work in order to beat the rate. Of course, there's no law that says just be cause the shop charges flat rate they must pay their mechanics flat rate, but that's how it goes.

If you can find a good, honest mechanic, give him your business and recommend him to others. Whether he charges flat rate or not.



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Allan

10-25-2003 04:03:10




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 Re: Re: FLAT RATE - is it fair ? in reply to MarkB, 10-25-2003 03:01:46  
Hi Mark,

I respectfully disagree. Quite the opposite is true, because if the job bounces, the tech has to eat the comeback out of his own pocket. He never wants to see that job again, because it will cost him money.

I think what you are talking about is the question of: does he go the extra mile? No, because he does not get paid for it and he can't afford to. However, a good tech will always correct the problem.

Example: A truck comes in for a leak at the water pump. The book pays him 8 tenths of an hour to replace the pump and the new pump is not painted. Is he going to stop and paint that new pump? Nope, it would cost him time and money; and, from an operational point of view, paint does not make any difference. He is only paid to correct the problem; therefore your engine is going to get an unpainted water pump.

I agree however, find a good tech and stick with him. Tell everyone you can tell about this guy.

But, here is a lightning bolt for you:

Only 1 in 100 really know what they are doing. They rest are all guessing, they are "parts replacement experts" and they are gambling with your money. A customer should never have to pay for the same job twice (EVER!), nor should he have to pay for any un-needed, “trail and error” parts and labor. In this case, find another man.

Look for the tech with the grey hair. He’s been there and he knows what he is doing. :>)

Just my opinion,

Allan

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loren

10-25-2003 11:17:08




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 Re: Re: Re: FLAT RATE - is it fair ? in reply to Allan, 10-25-2003 04:03:10  
I disagree with the "grey hair" part. When I started wrenching 19 years ago there was a fella working the next bay over that I'd of like to dug a whole and burried many a time. Stupid like you wouldn't believe. Went through a 4bbl on an old turbo'ed W-200 and the next morning when he went to finish the other work on it it wouldn't idle down. He found out the secondary butterflies were out of place holding the throttle open. $700 for a new turbo because of a $0.12 screw. Broke a manifold on a Jeep because of torquing it down before locating on the dowels. The list went on and on. It all depends on if the tech WANTS to do a good job. Pay, time, repremands, or nothing else will make someone do a good job, just desire.

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G-MAN

10-27-2003 08:02:56




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 Re: Re: Re: Re: FLAT RATE - is it fair ? in reply to loren, 10-25-2003 11:17:08  
Right on. If you base your choice in technicians on the oldest guy there, you're not getting ANY guarantee that he's the best. Just because he's been doing it for 30 years, doesn't mean he's been doing it RIGHT for 30 years. That's not to say that young guys are the best either. There are good and bad in every age group. Your best bet is to TALK to the technician and question him. If he can look you in the eye and answer your questions to your satisfaction, that's more than half the battle. And if he admits that there's something he doesn't know, goes to the book or someone else and finds out for you, then that's three-quarters of the battle.

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Kelly C

10-24-2003 21:12:27




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
What I look for is a good honest Mechanic.
Some are crooks. They have great prices but you pay more for crap you didnt need.
I finnaly found a guy who is in my opinion good. He charges real time. Check the book on replacing a oil pan gasket on a 91 ford f150 4 wd. With the 302. The book calls for removing the intake and the motor mounts then jack up the engine to remove the pan. Also some thing with the trasnfer case. I had some real high bids on that job. In the 5 or 600 dollar range. This guy charged me $50. He lowered the pan a 1/2 inch. Cut out 1/2 the bolt hole in the gasket and fished it in and around the bolts.
Took him 15 min.
Now I still spent $500 that day. I had that much budgeted. SO I had him do a tune up, Oil change, Timing gear and belt, Flush the radiator and some thing on the Catiletic converter. The 500 included a $50 tip to take his wife out. Needless to say he has done all my fixin ever since.

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Never Screwed....

10-24-2003 20:12:45




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
I've got a suggestion for you, learn to do it yourself and then if you ever get screwed, you can stand up straight---look right square at the mirror and say to yourself---I Pucked my SELF.
No doubt you'll be mad as can be at the image in the mirror, heck, give him the finger (you'll definately feel better). Guys like you make me...geez....not even worth bothering with... I spent 65 dollars this morning getting an eye examination for a new pair of glasses. I go in at 7.45 lady at desk takes down the info. ----- Hell, it ain't worth telling...

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Rookie

10-24-2003 21:08:01




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 Re: Re: FLAT RATE - is it fair ? in reply to Never Screwed...., 10-24-2003 20:12:45  
Did any of your teachers ever mention to you that you have a difficult time expressing yourself? I still can't figure out exactly what you're trying to say. You start saying something and then sort of wander off into space. Try to focus in a bit more old boy!



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RJ-AZ

10-24-2003 19:19:24




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
I have worked flat rate in both independent shops and a GM Dealer ship. I was in the GM shop in the early 80's doing warranty diagnosis and repairs on 5.7 Diesels, early computerized feed back carburators and the 700 R4 tranmission debut. talk about lose your shirt quick. We said there were two types of jobs Dog Sh#t and Home Runs and the service manager had a juggling act keeping it fair for all the techs.We could request another 1/2 hr for farm or construction trucks (clutch or tranny) because of mud and crud. A flat rate tech is lucky to get 40 or 50 percent of the posted shop labor rate. There are two time standards - warranty and non-warranty. No work no pay, from early December till mid January we polished our tool boxes a lot. If you had a comeback you did the repair free or your pay was docked accordingly if another tech had to do it

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Allan

10-25-2003 03:08:11




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 Re: Re: FLAT RATE - is it fair ? in reply to RJ-AZ, 10-24-2003 19:19:24  
RJ,

Wow!! What a mouthful!

How many of those front seals did you have to eat before GM found out that they had a design flaw in the pump? We should have guessed what was coming when the trucks wouldn't even back off the transports when new.

How about those stumbling, hesitating, dying wimpy little 305s? Weren't those a fun kick in the pants?

And that broken head bolt on that little 4-pop iron-maiden? Always the same bolt. Yes, those are some bad memories.

But, ya know what my friend? We endured, we learned and we worked around it and now in a lot of ways, we are the better for it.

It still makes me feel good when I can diagnose a broken sun-gear shell over the phone just by the customer's symptoms.

Or, explain to the shade-tree(er) that timing has absolutely nothing to do with his 250 6-cylinder dieseling after shut down.

We can honestly say that we've been there and we've done that. But, I'd be damned if I'd ever do it again. The tech is at the bottom of the food-chain, no matter from which angle you look at it.

Regards,

Allan

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RJ-AZ

10-25-2003 09:08:28




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 Re: Re: Re: FLAT RATE - is it fair ? in reply to Allan, 10-25-2003 03:08:11  
Allen I am now working for the stae of AZ on straight time w/ot available. Still got to put in a few more years though.

When I was at the GM shop a transport load of IROZ Camaros pulled up while the factory rep was there and I said "well heres another truckload of warranty work". Yep it was interesting but I don't miss it a bit. I do a lot of long distance diagnosing for my dad and brother in Montana. He had his old 4X4 GMC 292 into several shops and couldn't make it run any better. I told him about the tin plate under the carb between the int/ex manifold over the phone and it cured that one.

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wheelman

10-24-2003 18:23:13




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
Read Allan's veiw I'm with him....But the real thing is to find a good shop you can trust Hopfully one that will explain thing such as this to you and doesn't mind.



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Sid

10-24-2003 17:56:52




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
I think the flat rate needs some adjustment and not every case is a textbook case. I had steam come boiling out from under the hood and could not find anything. I took it to my second choice my first was on vacation. They pressure tested the system and found a pin hole leak in upper radiator hose. I told them to replace the lower while they were that close to it. I was charged three hours by the computor they just punched in what they had done and computor spits out a bill. From the time I had pulled of the road and waited for them to get to it, till they handed me the bill, was a grand total of One hour twenty minutes. I was charged for doing some things twice that was not done twice. Yes I know that any business is a tight go a lot of time these days but the system needs to be improved. another example of cheating by some shops is a spark plug does not get replaced because some other part needs to be removed to get to it. A lot of unneeded expense in auto repair now days is that it seems that no thought is given to ease and simplicity of even what should be regular maintenace.

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Loren

10-24-2003 17:41:58




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
The way I did it when I ran my auto shop was if the job was listed in flat rate, that was the estimate. If there was a gross difference in me getting the job done quicker(virtualy never is) then I'd split the diff. If I was right in the diagnosis and the estimate was listed in the book but it took me considerably more time to do the job then I didn't get much of a dinner. The only times I could justify charging extra was if the estimate turned into a different problem when opened up. Guess that's why I'm welding/fabbing now($$$).

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Sid

10-24-2003 18:08:38




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 Re: Re: FLAT RATE - is it fair ? in reply to Loren, 10-24-2003 17:41:58  
I appreciate you situation and have seen to many guys look you who have tried to be fair and have it work against them that is why "we" customers need to be a little more understanding in what a mechanic is up against. Had some work done one time and things pointed to a greater more expensive problem wich did not solve the problem. I turned out the first attempt to fix the problem was a faulty new part now I belive Ron did the right thing under the circumstances but when I mentioned I did not quite think that I should have to pay the whole thing we agreed the first part I paid 100% the second part I paid for parts he ate his labor. I believe the fair thing should have been some compesation from the new fault part but NOoooo. Needles to say I have been back as as long as I need to go to a shop that is wher I am going to go cause I know I will get what is right for both of us. Yes he does not hesitate to say took longer than I thought and he bills accordingly.

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Allan

10-24-2003 17:29:27




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
Hi Rookie,

I've worked flat rate all my life....it is as fair as it is going to get.

Having said that, there are some problem areas.

Foremost of these is the customers understanding of how the system works. I think instead of calling it "hours", they should call it something different, like say, 'units'.

Here's how it works: The book says that an overhaul on an automaic transmission in a GMC Yukon should take 7.9 hours and it should take the tech and additonal 3.8 hours to R&R the silly thing.

That's the end of it; the customer should be billed 11.7 hours, whether the tech can pull it off in 8 hours or if it takes him 27.0 hours. The customer still pays that original 11.7 hours like the "Bible" says.

So, young Billy Bob Wrench does the job, he hasn't been doing this very long, and he screws up. He has to pull the thing again and reopen it. He spends 3 days on the thing and finally gets it correct.

He has lost his shirt because the customer still only gets billed that original 11.7 hours. After about 6 months of this, it dawns on young Billy he really should get good, or get out. He can't live on 2 days pay per week.

Now, take the guy who has been doing this all his adult life. He has learned these things inside out and knows all the little shortcuts to make the job go easier. He knows which tools to grab and knows each and every step he has to make. He knows what is wrong with the unit before he lifts a wrench because he has done 1000 of these repairs before. So, let's say then, he can do it in 5 hours.

He is making money because the customer still pays that original 11.7 hours.

What the term 'flat rate means' is: as far as the customer is concerned, is that "this" particular job should take "this" long to do, based upon a long, long history of this repair.

You speak of "extra time". This is usually only allowed in very small shops and then only after the customer gives his 'okay'. It is, really, kinda rare to see this practice.

As an aside: Also, there is the problem of diagnosing. Some pay it, some don't.

I worked for GM, who didn't. So, you learn very fast to know what is wrong with a mechanical system before you ever open it up. Time is money, and you can't afford to waste time.

Allan

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JOHN (LA)

10-25-2003 05:43:38




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 Re: Re: FLAT RATE - is it fair ? in reply to Allan, 10-24-2003 17:29:27  
VERY GOOD POST ALLAN!!!!! !!!!!
People will all ways have something to say if you do there 11 hour job in 5 hours. But on the other hand how many times have you chased an entire elec system down and got paid to repair a wire end.
If they got charged per work time they would be saying that mans to slow give me some one else. Poor Billy Bob Wrench would never learn any thing cause he would never get a job.

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G-MAN

10-24-2003 16:53:56




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 Re: FLAT RATE - is it fair ? in reply to Rookie, 10-24-2003 15:27:46  
A true flat-rate works out well for both the shop and customer, when used correctly. I am a JD tech, and we use SPG times published by Deere for a lot of jobs. If I've done a job time and again, and am well familiar with it, yes, I can beat flat-rate by a fairly good margin, depending on the job. This does no more than make up for the times when we go over on a job, which is unavoidable, which can and does happen frequently. If you run into a problem machine, have a bunch of broken off bolts, have to do a bunch of cleaning (make sure your machines are clean when you take them to the shop - I've done jobs where it took longer to FIND the part I needed to replace, under six inches of gunk, than it did to replace it), or run into other problems, your flat-rate goes out the window. And about those extras, you should be informed when a job is going to take longer, BEFORE the extra work is began. That way, you know and the shop manager knows you know what's going on, which eliminates any confusion (or haggling) at bill-paying time. Some customers just say fix it no matter what, and some want to be keep informed constantly. I'd say you fit into the latter category, which I have no problem with. What I do have a problem with, is when I bust my butt to do the best job I can, get it done in good time and correctly, and a customer comes in and says that it should have been done faster. Particularly when he has no clue what was involved in the repair. Flat-rates are based on average technicians working on average machines in an average shop. Changing any one of those variables skews the whole system. All technicians are not created equal. If you want to feel like you're not being screwed, request that a technician that will use the full allotment of time do the job, then you'll know you're getting your money's worth. Most customers I deal with would rather pay the little bit extra to have their machine done faster, particularly during the busy times of the year. Trust me, for every flat-rate job a shop makes money on, there is probably another they're losing money on. Just a little perspective from a guy on the other side of the fence.

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RayP(MI)

10-24-2003 17:14:17




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 Re: Re: FLAT RATE - is it fair ? in reply to G-MAN, 10-24-2003 16:53:56  
Just finshed a repair on wife's car that the manual said should take 2 1/2 hours... My time, not counting cursing breaks was more like FIVE hours. (AND I'M NOT A NOVICE MECHANIC - and had all the proper tools handy) I think that many of these flat rate manuals are pretty conservative on the time allotments. I'm sure they have the times of experienced mechanics, making these repairs after several practice runs, on a test stand, not in real-life engine compartments, etc.

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Eric Rylander

10-24-2003 17:48:28




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 Re: Re: Re: FLAT RATE - is it fair ? in reply to RayP(MI), 10-24-2003 17:14:17  
I worked BRIEFLY in a flat rate outfit. I worked on MerCruiser marine I/o's for a guy who told me how I'd make all this money on this stuff.

It was a rinky dink marina, had a Handi-House for a shop, if it rained, you were rigging a poncho over your head to work in it.

I'd get paid 30 minutes to R&R an outdrive unit, but the old nasty stuff we got in always had seized bolts, etc. on it so I never made it. Also, we had NO WORK so after taking home a whopping 18 hour paycheck one week (no benefits, either) I quit.

I later learned that the manual he based his rates he paid me on was the WARRANTY guide which very specifically states the rates are based on new equipment in a organized shop. And it says to add "X" amount of time if excessive corrision was present.

I think it's a good deal customer wise to pay flat rate- and really, if you think you are getting hosed because you paid 12 hours of labor and the tech finished it in ten, go to place that charges time and material- believe me- you'll come out ahead to go to the flat rate outfit, it's really the only way you'll know how much it will cost ya.

Eric

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