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I need an estimate
A customer walks into a new-car dealership and says to the Service Advisor, ?Hi, I have a 1998 vehicle that I purchased from you. I need an estimate to replace the water pump.?
The Advisor replies: ?Sure thing. What is the license number of your car so that I can look up the correct parts pricing and availability for you??
?My license number is ABC 123.?
The Service Advisor completes the computer check. ?Okay, we have the water pump in stock, and it will cost you $75.80, plus labour, to install it.?
?What is the total cost for parts AND labour?? the customer asks.
?Sorry,? says Service Advisor. ?I can only give you a price on the parts. The labour price will depend on the length of time the technician takes to install the water pump.?
The customer gives the Service Advisor a confused look. ?But I need a total price to see if I can afford the repair.?
?I understand,? replies the Advisor. ?But each of our 22 technicians takes a different length of time to complete jobs. A technician?s work experience, tool investment, break time and apprentice help all impact on the job completion ? these factors, and more, will determine how quickly or slowly a job gets done. Some technicians work slower, some work faster. It depends on the technician.?
The customer is unconvinced and confused.
?I?m sorry that I cannot estimate how long the job will take. I can, however, tell you with certainty, that it will be $89 per hour, times the number of hours spent on the job.?
The customer appears totally flustered now. He/she wants to know, with certainty, what the labour time is to install the water pump.
In reality, the above scenario is a fictional exchange meant to illustrate why, despite customers? requests, repair shops cannot base labour estimates on actual repair time.
In fact, dealerships do provide firm estimates. Bill 22, which became law in 1988, stipulates that repair shops must provide accurate estimates to within 10% of the final price. Dealerships do not proceed with any repairs until the customer has authorized the work and the estimate. And, no extra repairs will be made unless the customer has authorized the work, after a Service Advisor or technician has explained to the customer why the extra work should be done, and how much it will cost.
In our industry, we use an estimating system known as ?flat rate.? Times are assigned for each job and the technician is paid according to that amount of time, regardless of the actual time spent on the car. The times also account for a road test after the repair.
How are these times per job determined? Chilton and Mitchell are two, independent companies that produce publications containing times per job for all makes of vehicles. Manufacturers also supply their dealers with manuals containing times for most types of repairs. The manufacturers know how the parts are assembled, and they know how long it takes to replace any part.
The manufacturer believes that the flat rate system is a fair way to compensate dealers for warranty repairs. Insurance companies also pay us, on insurance claims, by the flat rate system, and insurance companies, like our manufacturers, never overpay us for anything.
A customer may complain that he/she was billed for 2.0 hours to replace a water pump that took a technician only 1.7 hours to complete. On another water pump replacement, another technician complains that he will get paid only 2.0 hours when it took him 2.5 hours to complete. Perhaps that technician encountered a rusty bolt, slow service at the parts counter or excessive traffic on the road test. It is also important to know that technicians often work in unpleasant conditions ? in the sweltering heat, or with ice and snow dripping all over them. These conditions, too, can increase the repair time.
Let?s face it - technicians try to ?beat the clock?. However, there are quality safeguards built into the system. If a repair is performed poorly, the car will automatically go back to the same technician to be fixed, at no charge to the consumer and for no additional pay from the dealer. This ensures that a customer?s car gets fixed quickly and accurately. The system also ensures that customer wait time, during the repair, is kept to a minimum. So, if you happen to get out of the repair shop 15 minutes early, smile and be happy ? don?t begrudge the technician for gaining 15 minutes.
Many technicians have invested over $20,000 of their own money on tools that enable them to work quickly (most dealers do not supply tools). Also, their training needs to constantly be upgraded to keep pace with the never-ending introduction of new features and technology on today?s vehicles.
The flat rate structure is a very transparent system that has been around for decades. It allows for accurate quotes, promotes quality work and provides quick service.
Ken Shaw Jr. is President of the Toronto Automobile Dealers Association and is a new-car dealer in Toronto. E-mail comments to president@tada.ca
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