Understanding Labor Rates, Maintenance Agreements, & Warranties
From working in the auto repair industry for as long as we have here at Sun Valley Imports we recognize that some people have never had an explanation of labor rates and how they are applied. This can be said for new drivers as well. We would like to clear that up for you and give you some tools to determine what your best option is. To provide a brief analogy: When you visit a doctor, for any service, they have an office visit fee along with fees for specific items such as an annual exam. In this scenario the office visit is the labor rate and the specific item fee such as the exam are service and repair items.
Most doctors charge different dollar amounts for their office visit fee and so do auto repair shops. Some repair shops start at $99.80 per hour and some start at $150 per hour. Most independent repair shops do not have the same overhead as dealers and larger shops so they can keep their hourly labor rate low. Sometimes independent shops do not provide the same “free” amenities larger dealers and shops offer and therefor do not have to recoup that cost in the labor rate fees. Dealers do have to handle specific issues with computer programing in some cases. Most importantly, just because an independent shop doesn’t charge as much as a dealer might it doesn’t mean they do not have the tools and equipment necessary to perform the same repairs at a lower rate. Please check our Services page for information about our rates and services.
Labor rates are usually calculated hourly. So if you need a diagnostic completed to find out why the A/C has suddenly stopped working and it takes 1.5 hours to diagnose the problem at $99.80 per hour that charge will be $149.70. This rate may or may not include the parts/fluids/gasses needed to complete the diagnostic. Always be sure to ask. A diagnostic fee is usually separate from the repair cost for parts and labor. The parts needed to repair a car usually have a separate charge than what the labor charge will be. In some cases the shop may choose to waive the diagnostic fee if you have the car repaired at the time of diagnostic. Again, ask to make sure.
There is also a separate charge when completing service maintenance for your car. There is a charge for the parts needed (oil and filter) and a charge for the labor to complete the oil change. Always ask to ensure the parts and labor are included in the estimate you were provided.
Maintenance Agreements are a bit different and can affect your labor rates depending on what is in the agreement. Most maintenance agreements are offered at the time of purchase and the cost is added into the total cost of the car. So you don’t have to pay out of pocket as an extra expense for the service (oil changes, brake changes, etc.) when it is time for these things to be done but you are still paying for it in the monthly bill you pay every month for the car. Without the service agreement you are going to pay whatever labor rate they have set when you need that maintenance. If you are going to a dealer, you may be paying more for their service agreement than you would if you were having the service completed without the service agreement at an independent shop. Most independent shops can save you between 30 and 50 percent off of what the dealer can offer even if the cost is added to the total cost of the car loan. Please note that service agreements do not usually cover repair work needed when it is needed. Always ask. Can buying this agreement save you money? Possibly, depending on how much you would have to pay for the service maintenance without the agreement at a different facility.
Warranties can also affect how much you would pay for labor rates. This includes warranties from both dealers and aftermarket warranty companies. Because dealer warranties are something offered at the time of purchase they work like service agreements which means the amount you would pay for labor rates could actually be more expensive than not purchasing the warranty but instead using an independent shop for your repair needs; the main difference being the out of pocket expense at the time of the repair. There can also be a deductible payment required at the time of the repair.
Much like dealer warranties aftermarket warranties have to be purchased. You can choose to pay a lump sum at the time of purchase or you can make monthly payments. However, with aftermarket warranties you will have a deductible depending on the agreement. Most companies do have deductibles. The labor rate is usually not affected by the warranty but it is still something to think about because you will likely have the deductible.
At Sun Valley Imports we take pride in keeping our rates low for our customers. While we are not always the least expensive we make up for that in quality. After all, would you rather pay a fair amount for a great repair that is done right the first time or would you rather return for the same issues potentially forking out more money each time.
Here is a link to RepairPal where you can check out how much you could pay on any given repair or service. This website gives a dollar amount range of which we are usually at the lower end. This website does not provide labor rates for individual repair shops.