Why do auto repair shops have to mark up parts by 2.5x

[louieagarcia]

One reason....

Overhead.

Own your own business and reality will present itself in a hurry.

Why wouldn't overhead be rolled up into service pricing/fees? Rather than parts?

[ranchdog]

Why wouldn't overhead be rolled up into service pricing/fees? Rather than parts?

I agree. I think I would actually feel better about that than feeling like your getting screwed on parts. Just put down a shop overhead fee. I know that guy hunts so maybe he should list a "My hunting / fishing overhead fee" LOL

RD

[Bmarsh9]

I can almost guarantee you if they put an actual ford oem hub on there that price is spot on as far as the part goes. When I worked at the dealership and my hub went out my cost was roughly $370 which is cost plus 10% for employees. So the $440 seems right in line with what it should be, now if it was an aftermarket hub assembly then I can't vouch for that. A lot of people complain about book time but when the repair is a butt kicker and you lose time on the job you never hear the owner complaining. Dealerships have standard diag time and if it takes you double or triple that to properly diag the issue you typically just get the standard diag time. In some cases techs would go to the service writer and ask for additional diag time but I never did that in my 12 years at the dealership because I knew there were plenty of times I made out on my diag. Also Ford warranty times are derived by using a non ford mechanic that is ASE certified and they use air tools to disassemble but only hand tools on reassembly. I know the OP was just venting about the part price mark up but there were other comments in there I was putting my two cents in on.

[tigerscowboy]

I can't speak on behalf of another business owner I don't know. I can share that we are transparent with our customers and pricing. Labor and Materials + 30%. If there are no mistakes and we are efficient our company margin is 8-10%.

Most of our clients appreciate the honesty and transparent approach while 2 out of 10 will gripe that we are ripping them off.

[rtp]

To the OP......because they can that is why. If you had a product/service wouldnt you charge as much as the market would bear?

[Pineywoods]

This is what I do. I buy a higher quality part cheaper, then have the shop install for an agreed to price.

Yep been doing this same thing for years if it's something I can't fix or don't want to fix

[Goldeneagle]

The book prices are actually done by the manufacturer to set the rate for warranty repairs. A good mechanic can usually do the repair in less time but has to be careful. A come back is on his time. Parts are always higher at a repair place, just the way it is. Inside door handle from Ford $65, bought on line $27.
The mark up is to keep the doors open. About half of the labor go to the mechanic's wage, the rest pays for all the support staff, employee benefits and the building expenses.
In a dealership, the garage is expected to pay for all the dealership costs. The sales department is where the dealer profits.
There are a lot of behind the scenes expenses that have to be covered from some where.

Doesn't make a product sound too good when the repair dept. is what keeps your doors open.

[denimdeerslayer]

I buy almost all my truck parts from rockauto. Way cheaper than anyone else. If I cant do it myself I have the part delivered to my mechanic.

[meltingfeather]

Because they can?
That covers the price of just about everything.

[stickbowcoop]

I used to be a motorcycle mechanic back in the day, and both shops I worked at had a policy that they would not install customer supplied parts. There were too many failures due to guys buying the cheapest parts they could buy and then blaming the service guys for it. So they just stopped the practice altogether. Plus they made money on parts of course.

I do as much of my own work as possible because somethings in my opinion are crazy. My wife called the Chevy dealer in PA (I was already here in TX) for front and rear brakes on our car. Just shoes and pads, not rotors/drums and they told her $1250. That seemed excessive to me. Luckily she was able to get our nephew to install them for about $100 in quality parts and we gave him $100 for his hour of work and he was happy. He is a heavy equipment mechanic. I know shops have a lot of expenses but $1250 for brakes really seemed high to me lol.

[HTDUCK]

There are some parts I absolutely refuse to allow customers to supply.
Alternators, starters and anything to do with a brake system.
Why ?
Liability.
Read of a case where a shop installed an alternator and the thing had not been reassembled correctly. That night while his car was parked in car owners garage the alternator shorted internally, the car caught on fire burned his house to the ground. And of course there was a huge lawsuit .

You bring me the cheapest brakes you can buy at VatoZone and then come back a week later complaining of noise or get in a wreck and claim your brakes failed and caused the accident. Not worth the $95.00 charge to install them.

Then there is the whole issue with you bring me a part, I tear your car apart in a lift only to find out it's the incorrect part and the right one isn't available locally today, I now have a space in the shop where i could be working on something else that is tied up not making me any money.

As for 50% of labor rate going to a tech ? Where ? Sign me up !
I'll go back to turning wrenches in a heartbeat rather than running the show.
Most techs are paid 25-30 % of the hourly rate a shop charges.

Also, shops use software programs that automatically calculate markup on parts.
It's up to the shop owner to set whatever percentage that is.
Not uncommon to see shops trying to achieve 60% profit on parts and labor to cover operating costs.

[Bmarsh9]

How did I indicate to you that the repair shop was all that was keeping the doors open

[Bmarsh9]

Doesn't make a product sound too good when the repair dept. is what keeps your doors open.

This?

[ranchdog]

I do not expect a mechanic to install parts I have bought myself. I just want a fair price on the part they do provide to me. I understand they need to mark it up a bit. My problem was 2.5 times the cost. I was the one who called him back and said make sure its a quality part, I don't want cheapest available. It's an F 250 and I have a heavy after market bumper and winch on it. It doesn't have to be OEM but a good part. In this case Timken is a solid brand of Wheel hub assembly so I was good with that. Probably if they had used OEM he might not have been able to mark it up as much as he did.

[Goldeneagle]

The book prices are actually done by the manufacturer to set the rate for warranty repairs. A good mechanic can usually do the repair in less time but has to be careful. A come back is on his time. Parts are always higher at a repair place, just the way it is. Inside door handle from Ford $65, bought on line $27.
The mark up is to keep the doors open. About half of the labor go to the mechanic's wage, the rest pays for all the support staff, employee benefits and the building expenses.
In a dealership, the garage is expected to pay for all the dealership costs. The sales department is where the dealer profits.
There are a lot of behind the scenes expenses that have to be covered from some where.

I was referring to this.