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Old 12-19-2013, 10:37 AM   #1
rmf917
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Dealer labor formula question

Hi everyone,
I recently took my car in to the dealer to have something fixed. When I picked up my car, I looked over the invoice and I was charged for 3.8 hours of labor totaling $576.87, which works out to just over $150/hour. This seems high. I called the dealer back and asked what their labor rate was, and the service adviser said $139.87/hour. I then inquired as to why I was charged over $150/hour, and he explained that they employ a variable labor rate scale that "tapers up and then goes back down," saying it was for efficiency. He also said that "a lot of dealers do it." I've never heard of anything like this before and it doesn't seem right. I was doing a little research and I see that mechanics can sometimes be paid a variable rate, but I found no evidence of customers being charged a variable labor rate. The fact that when I asked what the labor rate was up front and he gave me a flat rate rather than explaining the system also seems a little off.

What do you guys think, have you ever heard of this before?
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Old 12-19-2013, 10:44 AM   #2
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$139.87/hour is an odd labor rate to begin with. I've heard of different rates for different types of work (body, mechanical, a/c work, structural, glass, suspension, etc), but never a sliding scale of labor rate for a specific category. They may charge more for the initial hour or two to make more off the one hour oil change jobs. Ask for a breakdown from them if you're really curious.
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Old 12-19-2013, 10:52 AM   #3
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Sounds like a load of crap as I thought that the labor rate had to be posted by law in most states.

Agree that labor rates do vary, body is usually about 1/2 of mechanical, but if you can get the body shop to do the mechanical part you can make out as many times the body guys have to do a lot of the mechanicals anyway.

I also do not by the $138.87 hourly rate, would make it really hard to split to a 1/10 of an hour or what ever the minimum split would be.

The labor rate should be posted in the service department somewhere on the wall?
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Old 12-19-2013, 11:20 AM   #4
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When I was asking the SA about the system, he got kind of defensive about it. The whole thing seems kind of sketchy. What happened was my car was broken into, so I had to have the window replaced. I figured my insurance was footing the bill so might as well take it to the dealer. When I submitted it for reimbursement, my insurance agent said that the book value for labor to replace a window is 1.8 hours. The shop also said that the window regulator was damaged and needed to be replaced, but the quote said no additional labor for the regulator. The SA said that it took 2.8 hours to do the window and they billed 1.0 hours of labor to clean up the glass. This also seems like BS but I don't really have any recourse except to file a charge back or complain to BMA NA and/or the BBB. The SA said the tech actually spent 4.2 hours on the car but they only billed for 3.8. The whole thing seems suspicious. The total bill to replace a the window glass, regulator, labor, and shop charges was over $900.

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Old 12-19-2013, 11:53 AM   #5
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That's definitely sketchy. I had my window replaced after a break-in for under $200, including the replacement window. But this was at a independent shop, not the dealer.
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Old 12-19-2013, 12:15 PM   #6
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Quote:
Originally Posted by rmf917 View Post
When I was asking the SA about the system, he got kind of defensive about it. The whole thing seems kind of sketchy. What happened was my car was broken into, so I had to have the window replaced. I figured my insurance was footing the bill so might as well take it to the dealer. When I submitted it for reimbursement, my insurance agent said that the book value for labor to replace a window is 1.8 hours. The shop also said that the window regulator was damaged and needed to be replaced, but the quote said no additional labor for the regulator. The SA said that it took 2.8 hours to do the window and they billed 1.0 hours of labor to clean up the glass. This also seems like BS but I don't really have any recourse except to file a charge back or complain to BMA NA and/or the BBB. The SA said the tech actually spent 4.2 hours on the car but they only billed for 3.8. The whole thing seems suspicious. The total bill to replace a the window glass, regulator, labor, and shop charges was over $900.
Dealers and other shops are FAMOUS for not understanding book times and how they work.

For example, you have a water pump replaced on your car, the fan (assuming an automatic transmission car) and the serpentine belt needs to come off.

If the shop then states you need a fan clutch and serpentine belt, many shops will bill out the complete separate labor operations for replacing the fan clutch and the serpentine belt. This would be triple dipping. At MOST, 15 minutes should be added for changing the 4-6 bolts that attach the fan clutch to the fan, all other labor time is captured or duplicated in the water pump replacement.

I call BS on 1 hour glass clean up, a shop vac in the door for 5 minutes and you are completed, I bet you if you were to look in the door, there is still glass inside!!! At 1 hour to clear the glass up, I should not be able to find a piece of glass within 50 feet of my car.

The window regulator labor would likely almost cover the glass replacement labor? Not sure how much more is involve with getting a new piece of glass in the door if it is already broken?? The 5 minutes for clean up would have been the time the tech would need to disconnect the glass from the regulator anyway.

Time to visit the service manager. If the shop is honest, he will see a problem, if he tells you this is the way things are, pretty clear the entire place is a rip off!

Good luck.
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Old 12-19-2013, 12:23 PM   #7
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Typical dealer overcharge. Many dealers don't make money on selling cars, so they are motivated to "maximize" profits in the service department.
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Old 12-19-2013, 12:39 PM   #8
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Typical dealer overcharge. Many dealers don't make money on selling cars, so they are motivated to "maximize" profits in the service department.
Dealer used car department and the body shops are usually the most profitable.
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Old 12-19-2013, 12:48 PM   #9
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....The shop also said that the window regulator was damaged and needed to be replaced....
Was your window halfway down and did the thief stand on the edge of the glass? I can't think of any other way to associate a broken regulator with shattered glass.

BUT, all the dealer needs is authorization and the work -- however unnecessary -- can begin!
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Old 12-19-2013, 12:54 PM   #10
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Old 12-19-2013, 01:07 PM   #11
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Dealer labor rate in Chrlotte, NC is $120 an hr. Which is also a rip off. They use a book that say it takes this long to do this. Even if this only takes 30 minutes the book will be longer, more like 2 hrs. They also have the formulas you mentioned at some of these rip off stores.

We have a power company here in SC that has been charging people for a seasonal rate equation. Not even the state regulatory comminsion could figure it out. So just recently after 2 years of us paying it the state said they have to stop.

We're all getting robbed nowadays. I do my own work or hire a friend who is a mechanic. You don't have to have a so called BMW mechanic. A real mechanic can work on anything.

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Old 12-19-2013, 01:38 PM   #12
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Op take car to dealer and is surprised he is overcharged. shocking.

what did you have repaired?
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Last edited by Mango; 12-19-2013 at 01:39 PM.
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Old 12-19-2013, 02:07 PM   #13
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Quote:
Originally Posted by rmf917 View Post
Hi everyone,
I recently took my car in to the dealer to have something fixed. When I picked up my car, I looked over the invoice and I was charged for 3.8 hours of labor totaling $576.87, which works out to just over $150/hour. This seems high. I called the dealer back and asked what their labor rate was, and the service adviser said $139.87/hour. I then inquired as to why I was charged over $150/hour, and he explained that they employ a variable labor rate scale that "tapers up and then goes back down," saying it was for efficiency. He also said that "a lot of dealers do it." I've never heard of anything like this before and it doesn't seem right. I was doing a little research and I see that mechanics can sometimes be paid a variable rate, but I found no evidence of customers being charged a variable labor rate. The fact that when I asked what the labor rate was up front and he gave me a flat rate rather than explaining the system also seems a little off.

What do you guys think, have you ever heard of this before?
What dealer? BMW of Darien is terrible. They overcharge you and the work is sloppy. BMW of Ridgefied is great! The parts department sells parts for close to online prices and their workshops are brand new. They treat you well as a customer too. I think the rate is 140 an hour, but it's worth it if you are not going to perform the work yourself.
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Old 12-19-2013, 02:16 PM   #14
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This also seems like BS but I don't really have any recourse except to file a charge back or complain to BMA NA and/or the BBB. The SA said the tech actually spent 4.2 hours on the car but they only billed for 3.8. The whole thing seems suspicious. The total bill to replace a the window glass, regulator, labor, and shop charges was over $900.
You do have recourse. All repair shops in CT are overseen by the DMV. Speak to the Service Manager and let him know that you will be filing a complaint with the DMV if you do not receive satisfaction from him. It worked for me when I had a problem. They don't like the threat of DMV.

Then again, WTNH loves to go after businesses that have screwed people. There's always that option.
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Old 12-19-2013, 02:38 PM   #15
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Shops I have seen here is AZ have their rates posted in stores like Pep Boys and some tire shops. I don't think I have ever seen one in a dealership but it has been a long time since I have been to one of them to have any work done. I believe it is the law it has to be posted. The whole rate thing was explained to me once by a mechanic. Typically there is a book that tells them the hours they can charge for certain repairs. In most cases this is very generous. If a mechanic works it right they can bag the extra hours it does take them and make a tidy profit for themselves as well as the dealer. Another shop I now of says they only charge you the hours it takes, however, their scam is it takes them forever to fix it and they charge for hours they are not even working on your car.

However, in most cases, I have saved money in the past (and my dealer did this), since they have to remove a part anyway to get to another part they would only charge the time to get to the furthest in part and if you replaced a part on the way in/out you didn't pay the labor rate. They figured it was taken care of in the assembly/disassembly.
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Old 12-19-2013, 03:21 PM   #16
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I just called three different indie shops to get a ballpark quote on replacing aftermarket headers on my 330i with the OEM ones (which I have in hand). Just bought the car last night and with the holidays I'm up against it with getting it done so I can pass emissions in the 10-day grace period.

Shop 1: ballpark 3 hours, ballpark $500. Good garage, but some of the guys are condescending. Sure, take my money and call me an a-hole to boot, basically.
Shop 2: *flips through rape price book* Nine hours for one side and another 4-5 hours for the other side. Yes, ADDITIONAL hours. $900-$1000 minimum. I could practically hear him licking his fingers with excitement.
Shop 3: ballpark 2-3 hours, ball park $300-$400. And it seems like he's got a very good rep.
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Old 12-19-2013, 03:53 PM   #17
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I just called three different indie shops to get a ballpark quote on replacing aftermarket headers on my 330i with the OEM ones (which I have in hand). Just bought the car last night and with the holidays I'm up against it with getting it done so I can pass emissions in the 10-day grace period.

Shop 1: ballpark 3 hours, ballpark $500. Good garage, but some of the guys are condescending. Sure, take my money and call me an a-hole to boot, basically.
Shop 2: *flips through rape price book* Nine hours for one side and another 4-5 hours for the other side. Yes, ADDITIONAL hours. $900-$1000 minimum. I could practically hear him licking his fingers with excitement.
Shop 3: ballpark 2-3 hours, ball park $300-$400. And it seems like he's got a very good rep.
9 hours?! they must only have 3 tools. a screw driver (phillips) a hammer and some superglue. what an idiot.
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Old 12-19-2013, 03:58 PM   #18
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BMW dealer in my city charges two rates:

$150/hr is the "high tech rate"
$85/hr is the "low tech rate"- I asked about what jobs are low tech and the only example I got was oil changes and thats it
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Old 12-19-2013, 04:09 PM   #19
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OP. Is your insurance company paying the bill?
If your ins co is involved, the dealer would have had to get authorization from them for the added repairs.
It's called a "supplement". And if that's the case, who cares what the dealer charged. You aren't paying.
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Old 12-19-2013, 04:23 PM   #20
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I just called three different indie shops to get a ballpark quote on replacing aftermarket headers on my 330i with the OEM ones (which I have in hand). Just bought the car last night and with the holidays I'm up against it with getting it done so I can pass emissions in the 10-day grace period.

Shop 1: ballpark 3 hours, ballpark $500. Good garage, but some of the guys are condescending. Sure, take my money and call me an a-hole to boot, basically.
Shop 2: *flips through rape price book* Nine hours for one side and another 4-5 hours for the other side. Yes, ADDITIONAL hours. $900-$1000 minimum. I could practically hear him licking his fingers with excitement.
Shop 3: ballpark 2-3 hours, ball park $300-$400. And it seems like he's got a very good rep.
by sides i hope they dont think it's a v6...
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