I scratch my head every time I get my estimate for repair work to my car, why you might wonder; well I am just in astonished at the exorbitant fee for repair work for a car that is more than 10 years old. So I ask “why does it cost so much to get my car fixed?” This question must not be one that is only in my head, i thought I’d share the results of my research with you all. Let me help you understand why car repair costs so much.
Structure of repair quotes
Repair quotes for automobiles can be broken into 3 main sections:
1. Workforce cost, the going rate charged for the time spent repairing your car.
2. Material cost, the cost of the replacement parts needed to fix your car as well as any other materials needed to complete the repair work to your car.
3. Overhead cost, the garage or mechanic have an overhead such as the rent and rates on their property.
Understanding Material cost
Just like every business garages do mark up the prices of their parts, everyone has to increase the price of goods compared to the price they actually obtain the materials for. Mark up can be for a number of reasons, to cover the cost of transporting the goods, the cost of it sitting in valuable storage space and the warranty / guarantee (if one is provided).
A garage has an option to select from a variety of sources, the quality and price of each product brought from different suppliers varies. Specialist garages often use the parts recommended by the manufacturer, meaning more expensive and better quality components. You run the risk should you pay for parts which are not recommended by your vehicles manufacturer, but it might be cheaper and doesn’t necessarily mean it will break; physically both items are the same as one another except for price and build quality.
Understanding Overhead cost
Costs that are not directly carried by the motorist repairing their vehicle are the overhead costs like those of running the garage, keeping the tools and lights running etc. We’re not discovering any new land, so as you can imagine the cost of land and real estate will continue to rise, along with rents and leases which is a massive factor in the billing process we as a customer will not see. Other obvious overheads include electricity, gas and telephone.
A few you probably have not considered are the personnel indirectly involved in your repair such as accountants and receptionists. Equipment for today’s cars is extremely specialist as most cars now have built in computer systems which operate the mechanics of the vehicle. Couple this with insurance, rates, computers, company cars and you begin to get a picture of the actual cost of repairing your car.
This is just an overview of material and overhead costs, to find the first part of this article search for “Why does it always cost so much to repair my car? ” to read part one ‘workforce cost’.