By Joe Marconi
There is a proposed bill in Mississippi that would cap labor rates for collision shops. In my opinion, any bill that would regulate and/or dictate the maximum labor rate a shop can charge is s step in the wrong direction. In addition, as an industry we don't earn enough.
The Automotive Service Association (ASA) opposes this bill.
What are your thoughts on this?
Here's a link for more information:
I am a newbie here guys, I have a Tire and Repair Shop in the Panhandle of Florida. My father opened in 1961as a Tire, brake and alignment shop. We have adapted to the change of 1 stop shopping , Thanks to Sam Walton. Our labor pricing is going crazy down here it is skyrocketing for our area. I see a trend around our area that the independent will surpass the Auto dealerships in hourly rate. I have raised my rate to 100.00 hour and no one bats a eye. People in our area are just starving for honest businesses. I am fortunate, although we have worked very hard over the years. I am turning away customers almost seems I am picking and choosing who to work for. I have 10 stalls with 7 racks, 2 alignment . I am curious if other areas are seeing this trend, I am really considering putting in 2 or 3 locations to relieve my store. It is really crazy. I will tell you guys one thing I have done that has been a huge money maker for me, aluminum wheel repair , straighten, curb rash and painting. I start at 150 and go to 300, It generally takes me 15 to 3 minutes to straighten 1 wheel. I literally have 2 to 5 calls a day on it. I fix some curb rash with a small file and airbrush, I a paint allover body shop guys does them for 30.00 cash. I never take the tire of the wheel. Also most need a new tire with a bent wheel. I heat them and straighten them. I wish I would have done that 5 years ago. So Long, David
I've been thinking about multiple labour rates for a while, but I wasn't sure if this was viable. (note the numbers are subjective and generalized)
- You've got a lube kid doing oil changes, topping up fluids and washing cars etc. He's paid $15/hr
- You've got an apprentice tech learning, doing basic & intermediate repairs, preventative maintenance and is building his tool inventory. He's paid $24/hr
- You've got a journeyman tech doing high level diagnosis, complicated repairs, and has the most tools and training. He's paid $30/hr
I was thinking why is there only a single labour rate in most shops, whether posted or unposted?
I understand that most shops bill out their LOF and brake repairs as such, not based on hours but a flat fee for the job, but why not standardize it and have multiple labour rates?
Even in states who are forced to post their labour rates, posting your top level rate and having standardized lower rates could benefit?
Using the industry standard 70% margin on labour, you would get the following labour rates:
Lube kid: $15 / .3 = $50/hr
Apprentices: $24/ .3 = $80/hr
Journeymen: $30 / .3 = $100/hr
I've been reading a lot of online articles and blogs about this and finally came across the following:
The critical quote: "The better shops now have in place the following labour rates: 1. Maintenance 2. Diagnostic 3. Reflash 4. Fluid 5. Tire Install. Some shops even have a couple of others due to the type of services they can provide."
I was wondering if anyone does this? If so, how did you set yours up? Do you post multiple rates or are they generally internal?
Maintenance would probably be something like $80/hr in this case, since your top techs generally aren't required.
Industry standard for diagnostics would be $180-200/hr, since it's the most complicated, requires the most training and tools, and also to maintain a proper profit/hr for that bay since there are no associated part sales.
Reflashing I'm not entirely sure but I would think it would be around $125-150/hr for the same reasons as diagnostics, but not being as complicated and take less time.
Fluids would be around $50/hr
General repair would fall under the $100/hr rate
Car wash would be around $50/hr, while having a dedicated detail specialist would command higher rates, but mainly sell packages unrelated to actual time (which is what shops should be doing more of anyways haha)
Anything I'm missing? Anything you folks would like to add or comment on?