How Labor Charges are Calculated
A common concern of customers of an automotive repair facility is how they come up with the labor charges for a job completed. While an independent mechanic might use a variety of methods to figure out what to charge for a particular job, virtually all shops with employees use on standard method.
The method used to calculate the labor to complete any job comes from standardized tables showing the number of hours it is expected to complete the task. One publisher of such tables is Mitchell. Mitchell determines how long it will take an experienced mechanic, on average, to complete a job. Those rates are made available for mechanics to price their work online as a subscription service or in print form.
Using my father-in-law's older Mitchell rate book we can come up with some examples. While this book covers American cars through 1974, and the dollar amounts are obviously dated, the time required to do the repairs on the vehicles listed will remain the same.
In this book, as one example, the flat rate to replace the brake pads on all four wheels on a 1974 Oldsmobile is 2.6 hours. If the shop's labor rate is $85 per hour and the parts cost $50, the shop will likely quote you a flat price of $271 for this work. This price is obtained by multiplying the number of hours from the rate manual by the hourly rate and adding the cost of the parts.
If the mechanic can get the work done in less time, because of experience or access to specialized tools or whatever reason, the shop will be able to make a little bit of extra profit from the work. Profit that is probably well deserved if the job is done right. If the work takes longer because of unforeseen issues the shop might even take a loss on the work after paying the mechanic. But, all of these situations are taken into consideration when the shop sets their labor rate and the publisher determines the amount of time that is expected.
Where a garage might try to take advantage of customers isn't in determining what is being charged, either in hours or in labor prices. An unscrupulous mechanic is more likely to layer hours on top of what is included in the time in the labor tables.
For instance, in the brake example above, the manual clearly states that the time involved includes bleeding and adjusting the brakes. While not specifically mentioned, the time to put the car on a lift and remove the wheels would also be included. A mechanic that is trying to overcharge, however, will add charges for bleeding (.5 hours), adjusting (1.6 hours) and maybe even a charge to take the wheels off (as much as .4 hours per wheel). This would increase the labor charges from $221 to over $500.
Very few mechanics would ever be so brazen as to try to claim everything on that list but some will slip in charges for work that is included in the basic task. Most mechanics will quote you a single rate for any work to be done but, if you have any doubt about what you are being charged, ask them to show you how they've done the calculations and what they're including. If it is reasonable to assume that a task is included in the costs for a particular job, ask to see their rate book, or go to a different mechanic for another quote.
