Euro Motorworks Blog

How Do Shops Come Up with Estimates?

Posted by Gloria Heath on Wed,Sep 06, 2023 @ 03:05 PM

How to choose the safest luxury vehicle

When you purchased your European luxury car, you knew that you were making a serious investment. Naturally, when your vehicle needs a significant repair, one of the first things that goes through your mind is ensuring that your car will be running smoothly and getting back to its optimal performance.  

However, since European luxury vehicles require special knowledge and expertise, you’re also probably wondering how shops come up with the estimates before you get the bill. At Euro Motorworks, we know that luxury car owners are typically involved and curious about the maintenance process. Here’s everything that you need to know about how shops come up with estimates. 

Getting a Service Estimate for Your Luxury Vehicle 

Getting an estimate of your repair costs upfront, before you have any work done, provides many benefits for you, the consumer: 

Many car owners request an estimate of the repair upfront for several reasons, such as:   

  • Gaining an idea of how much you will pay for the repair 
  • Understanding what needs fixing, as well as exactly what the mechanic will be doing to repair your car 
  • Allowing you to shop this repair around to several different shops, which could save you money 
  • Gain a sense of each mechanic’s personality and approach to the job, which can be just as important as the estimated price 


Meeting and discussing the repairs with a trusted service team is crucial to understanding the repairs needed. Some shops may specialize in a certain vehicle or only serve certain models. For example, at Euro Motorworks, our team specifically services luxury European vehicles and Lexus.  

Once you’ve clarified that your car can be serviced, there are several components that go into the creation of an estimate for the repairs to be done on your luxury European vehicle. 

What Goes into an Estimate? 

Labor Costs 

Labor costs are 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 a “flat rate” database to gauge how long it should take a qualified technician to do a particular job on a specific vehicle. 

If your shop charges an hourly rate for labor, take note that the rate does not go directly to the mechanic working on your car. The hourly rate goes to the repair shop’s “overhead costs,” or 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 rent, utilities, insurance, administrative costs, marketing and advertising, and taxes. Just as with most other businesses, these costs must be recovered, so that the shop can continue to operate 

Luxury Vehicle Parts 

In addition to labor, the shop may need to replace damaged or worn-out parts. 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. New OEM parts are typically a common choice for newer models of European luxury cars. 


New aftermarket parts are another option. 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. Ask the shop about the quality and sources of the parts they will be using on your luxury 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. Be sure to ask your service team whether these remanufactured parts should come with a warranty. 

Your mechanic may give you a choice of parts sources, based on your luxury 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. 

Running a Diagnostic 

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. 

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, ask for further clarification, or visit the shop to see the problem for yourself.  

We’re Here for You, Every Step of the Way 

As Indy’s Luxury Service Experts for European and Lexus vehicles, our mission is to provide world-class automotive service. We pride ourselves on our transparency, especially through the repair process.  Contact us today to schedule an inspection or service appointment! 

Topics: car care, Auto Repair


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