FAQ-59


Book labor time versus actual time.


Dear Mark:

I have a commercial auto repair question for you. In connection with this question perhaps you could go over on your radio show the concept of "book" time for a repair facility when quoting the cost of a repair.

Back in the summer on July 8, 2004 I left my Phoenix house on a trip to Boy Scout Camp Geronimo outside Payson. I was going to the Camp to be present if it became necessary to evacuate the scouts from the site due to the forest fires around Payson.

My 1997 Chrysler Town and Country (mileage 76,000 miles) had been having a small squeak on starting that went away after a few minutes but on this day the squeak was much louder and did not go away.

Since the noise was really loud, and I suspected it was a belt idler, I decided it would be a good idea to have it checked as I was close to XYZ Chrysler.[ My father in law has a Chrysler van that had an idler fail when he was half way between Page and Kanab and ended up spending two days in a hotel while a repair shop found a replacement idler.] I had replaced the water pump on this vehicle about 3 months earlier and went ahead and bought a OEM idler at that time and tried to install it myself but was unable to do so.

The techs at XYZ Chrysler said it was an idler going bad. I told them I was on my way to the Camp and in a hurry. They said they would try to get to me right away. I asked what would it cost if I supplied the idler. The service rep said he would check on it. I went home and retrieved the OEM idler as I didn’t want to buy a second. On returning the tech advised me to park the van and they could get right to it. I took a seat in the waiting room and the van was taken back to their service bays.

After 20 minutes, a different service person came up to me and said my van was ready, and see the cashier for the bill.

The bill reflected a labor charge of 1.5 hours for one tech to replace the idler, even though I had been waiting only 20 minutes. I asked the cashier why was I being charged for 1.5 hrs when it only took 20 minutes. The cashier called the service rep to come up for an explanation, but after 10 minutes he didn’t show up and I was still in a hurry so I told the cashier I would pay the bill (with a credit card, per your advice) under protest and would pursue the matter when I got back to Phoenix.

I contacted the Service Manager a few days later and asked for an explanation. He said they charged me what the "book" specifies for the labor time to replace an idler - 1.5 hrs at their labor charge of $89.00 per hour. I said I didn’t understand how they justified simply pulling a time value out of the air for doing a repair and charge that for a task that took 20 minutes. He said it was the same price that I was quoted before I OK’ed the work to be done. I replied I never received a quoted price because the service rep said he would have to check as I was supplying my own idler.

He said he would check with his service rep and get back with me. He did and we held a conference call where the service rep was in attendance and claimed he had quoted me the price for the repair. I again stated that he had not, and indeed if he had told me it was going to cost $135 to replace the idler, I would have gone to another repair shop as I was familiar with what had to be done and it could not possibly take a professional mechanic 1.5 hours to do the work.

Things got a little ugly at this point, as he made a big deal of their making a spot for me to do the work as I was in a hurry. To which I replied I was grateful for them moving me to the front of the line, but didn’t understand how that justified charging me more than triple the labor time it actually took to do the job. The service manager offered to look into the matter further and call me back.

A few days later he did, and offered to take off a half hour of labor ($45.95) for which he subsequently sent me a check.

I am still fuming over this and think I got screwed. I haven’t cashed the check, and am considering reporting them to the Better Business Bureau.

I know from your show that you have done mediation work, so before I report them to the BBB, I would like your comments.

Thanks much for your time,

Mike


Hi Mike,

Before I answer your questions, I want you to know that you will not like most of my answer AND I want you to promise not to try and beat up the messenger, so to speak. If you agree to that, send me a note back with all of this info and I will respond.

Mark


Mark,

Fine with me, I don't even own a gun.

In your response, could you touch on the practice of using 'book' time to do a repair. Another shop told me I had a valve cover gasket that was leaking and quoted a repair price of ~$225. I assumed they were referring to the rear cover, but no, the front was leafing - by sabotage at that! I can say that because I replaced the valve cover gasket myself and 7 of the 8 nuts were finger tight, the eighth was slightly tighter. It took me about 20 minutes to replace the gasket - 'book' time stated 2.25 hrs. Easy to understand why people think they are getting screwed by shops.

Mike


OK Mike here we go . . .

There is no question that this whole issue would have been eliminated had they given you an estimate at the very beginning. That is their fault, no doubt abut it.

This is what it looks like from their eyes. You were in a hurry, you didn't or couldn't do the job when you did the water pump so it had to have been somewhat difficult. Then when they moved heaven and earth to get you done and you complain about the price. Then they make an offer to you, evidentially you accept it or they wouldn't have sent you the check and NOW you want to not keep the settlement you accepted earlier and not cash the check and tell the BBB on them.

Maybe think of this billing issue this way. You want a hole dug for a pool. I give you an estimate for $5000. (Now I realize that they did not give you an estimate and again that was a big mistake on their part.)  But I did and it was $5000. Does it make any difference to you if I dig the pool by hand over 20 days or go rent a backhoe and do it in three days. If I dig it by hand, I get to keep all the money, but if I rent a backhoe, a large part of my money goes to rent something that makes my life and job easier.

If it weren't for "the labor book" what would we do, how would we bid work? The labor book tells everyone how much time an average tech can do a job using normal tools. Techs buy specialty tools to shortcut the job. They use air guns and hoists, they have info they gained at their expense. They worked on a car for 10 hours to find a fix a problem they got to bill 2 hours for. They learn at their expense and sell what they learned in the form of labor. If they can do a job in .8 when it bills for 1.5, fine. But what happens when they take 3.3 to do a job that booked at 2.5, they don't get to go back to the well for more money, you, the customer get a deal. You got labor you didn't pay for.

But what about your "part" ? Had they worked on anyone else's car during the time they worked on yours, they would have made about half the labor (with the other half going to the tech and his benefits) and about 30% on the parts. They missed the parts profit because they let you bring yours. So they made less in that time frame than had they not handled your car.

Then you complain and it gets ugly. You end up with an offer you accept, but now you want to change the deal. This is the second time you changed a deal. The first time was when you told them to fix it WITHOUT an estimate. In the event no estimate is given, that doesn't eliminate the customer form all responsibility. It's not ollie,  ollie,  oxen and all repairs are free from that point. You can't kick them when the are down. You have SOME responsibility to ask for an estimate to eliminate this from happening, maybe 5%.

I have 10 techs who work 10 hours a day. So we have 100 labor hours to sell everyday. We charge 85 an hour. If we run 100% efficient, my daily labor sales should be $8500, right? Why are they then $5000 a day and we all are here every day, work hard every day but we can't get to that 100% mark? Because some we win on some cars and lose on most others.

For example, our cost on an oil filter and 5 qts is about 12.00. It takes 30 minutes to do an oil change start to finish and do it right. So if we pay our techs 35% of the labor and it takes an honest time of 30 minutes, we should charge you $20 for parts and 42.50 for labor. When was the last time you spent $62 for an oil change? No one has ever offered to pay us for out time we lost on an oil change and we actually use very expensive equipment to do an oil change.

Last, what about the service writer who took 30 minutes to talk to you, write up your invoice, order the part, organize the tech, bill the ticket and talk to you. Who pays the parts guy who pulled your part and delivered it to the tech? Who pays the cashier to handle the final transaction? You had 4 people involved in the repair of your car (serv writer, tech, shop foreman and cashier) not just one for 20 minutes.

But the point you bring us is a very good point. I have always believed that we shop owners confuse our customers by talking about hours, labor rate and dollars. We and I always just talk dollars. "Mr. Jones, it going to cost you $133.50 to have us do ....."   No hours, no labor rate, no confusion. Beside when it all comes out in the wash, none of that EXCEPT the money makes a darn bit of difference. So we should all stop using that to confuse and just start talking dollars.

Cash the check, let it go.

Then you say:

In your response, could you touch on the practice of using 'book' time to do a repair. Another shop told me I had a valve cover gasket that was leaking and quoted a repair price of ~$225. I assumed they were referring to the rear cover, but no, the front was leafing - by sabotage at that! I can say that because I replaced the valve cover gasket myself and 7 of the 8 nuts were finger tight, the eighth was slightly tighter. It took me about 20 minutes to replace the gasket - 'book' time stated 2.25 hrs. Easy to understand why people think they are getting screwed by shops.

The $225 was for both gaskets, I promise you. Second all valve cover gaskets have loose bolts that we never tighten, why? Because when you do 75% of the time, the gasket will tear and the oil leak will get worse. You see you come in, we think we'll be nice and tighten all the bolts, we do but you call back in a day or week and tell us it's twice as bad as it was, I was OK with the way it WAS, but now that you have made it worse, you need to fix the mess you made.

So we are damned if we do and damned if we don't.

We use the book.   60% of the time it favors the customer and 40% of the time it favors the shop and that is the best of all the other options available to us today. If they toss the book, watch out because that will open the door wide open for no parameters, no guidelines and nothing to compare fraudulent practices to. When someone charges you $400 to replace that tensioner because you are under the bus, in a hurry and in a strange town, with no book time, who is to say what he attempted to charge you was way out of line?

Good luck.

Mark


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