Most of us depend on our cars to get us to work, school, and to many other important activities. We make the monthly payments and we buy car insurance. We put in gas on a regular basis. Driving a car costs money.
So when your vehicle needs a significant repair, the first thing that probably runs through your mind is, “How much is this going to cost?” This is why an estimate is a very useful thing to have.
Getting an estimate of your vehicle repair costs up front, before you have any work done, provides many benefits for you, the consumer:
- It will give you a good idea of how much you will pay for the repair
- It will help you to understand what needs fixing, as well as exactly what the mechanic will be doing to repair your car
- It will give you a sense of each mechanic’s personality and approach to the job, which can be just as important as the estimated price
Let’s take a look at what an estimate includes, and how repair shops put one together.
What goes into an estimate?
There are several components that go into the creation of an estimate for the repairs to be done on your vehicle.
The labor cost
This is calculated by multiplying the amount of time it will take to perform the repairs (in hours) by the hourly rate that the shop charges. When estimating the time required, it is common for repair shops to use “flat rate” databases that spell out how long it should take a qualified technician to do particular job on a specific vehicle.
The hourly rate charged for labor is not what the mechanic who works on your car is paid. The repair shop has “overhead costs,” that it must recover. Overhead costs are all the things that the shop must pay for, on an ongoing basis, to keep itself open. These include:
- Building rent or mortgage payments
- Clerical and administrative staff
- Training costs for mechanics
- Diagnostic tools and specialized equipment for repairs
- Software and database costs and subscriptions
- Marketing and advertising
- Employee benefits
Just as with most other businesses, these costs must be recovered, so that the shop can continue to operate. This is one good reason why the labor rate may seem high to you.
The parts cost
In addition to labor, the shop may need to replace damaged or worn-out parts when it makes repairs to your car. There can be a large difference in parts prices, depending on where they come from.
New OEM (Original Equipment Manufacturer) parts come from the parts department of the local new car dealer who sells your vehicle brand. These are commonly the most expensive parts, because the dealer marks up the price charged to them by the manufacturer, who has already marked up the price they paid their parts supplier. Some specialized parts, or those on a brand-new model, may only be available as OEM parts.
New aftermarket parts are another option, but quality can be an issue here. Some are made by the same parts suppliers that make the OEM parts — these are usually of very good quality, and should cost less than OEM. But some are of very low quality and should be avoided. Ask the shop about the quality and sources of the parts they will be using on your vehicle, to be sure you are getting good quality parts.
Remanufactured parts have been returned to near-original condition, and perform as well as new OEM parts, for a much lower price. Remanufactured starters and alternators are common, and may be recommended by the shop as a money-saving alternative. These remanufactured parts should come with a warranty.
Rebuilt parts are a step down from remanufactured parts. Rebuilt parts start with used parts, and usually replace only what doesn’t work or has worn out. Rebuilt parts cost less than remanufactured, and will not last as long. They may come with a brief warranty.
Salvaged or used parts, sourced from a salvage yard or “vehicle recycler,” are another choice. These will cost the least, but may not have any warranty. These can be an acceptable option if your vehicle is very old, has lots of miles on it, and you’re not sure how long it will last before you need to dispose of it. This can also be a good low-cost option for things like replacement wheels, bumpers, body panels, and interior parts.
Your mechanic may give you a choice of parts sources, based on your vehicle’s condition and your budget. Keep in mind that if there is a large amount of labor involved in doing the repairs, you may be better off with higher quality parts. You don’t want to have to redo an expensive repair because your cheap parts failed! Also remember that the parts pricing will include some markup to cover the shop’s overhead costs, just as the labor does.
The diagnostic cost
If you have a problem that is electrical or electronic in nature, or only occurs intermittently, the shop may need time to track down and diagnose exactly what the issue is, before they can begin to fix it. Diagnostic time will be listed if the shop deems it necessary. Keep in mind that this piece is very difficult to estimate precisely in advance, so it may vary in either direction, once the mechanic gets started.
These can cover items like hazardous waste disposal fees, or materials needed to perform your specific repairs, as well as government-mandated fees. If you do not understand any of these items, ask for an explanation.
Even if sales tax is not listed on the estimate, be aware that it will be added to your final bill, in those states where a tax is in effect. Budget for it so you won’t be surprised.
If it’s not listed, ask the shop what their warranty on the repairs will be, for both parts and labor. This may also be another good point of comparison if you are price-shopping multiple repair shops.
Will my final bill be different from my estimate?
Depending on the nature of the repair, it could be. Simple repairs that present few opportunities for complications should end up very close to the estimated cost. But complex problems may reveal other issues (and costs) as the mechanic works through the repair.
If this happens, the shop should contact you immediately, report the new developments to you, and give you options on how to proceed. If you are unclear on what they are telling you, ask for further clarification, or visit the shop to see the problem for yourself. That may help you to understand what needs to be done, so you can make an informed decision.
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*source: Repair Pal. We are a certified Repair Pal authorized repair shop.