| For a repair shop, there is little profit in the $29.95 oil | | | | manufacturer's recommended 60,000-mile service |
| change. By the time a shop pays its technician, pays | | | | interval. The top hose was also premature. In fact, it |
| for the oil, the filter, and the hazardous waste | | | | did not need replacement at all, despite a very minor |
| disposal fees, there's no money left. This low profit | | | | problem easily addressed during the |
| margin is worsened by the extremely competitive | | | | factorymaintenance schedule--at no extra cost. |
| "Quick Lube" business, which forces local repair shops | | | | Check out the aftermarket part prices quoted below |
| to refrain from raising prices, despite rising costs. | | | | (including the unnecessary radiator hose). Compare |
| This all begs the question: If oil change specials, which | | | | these to the manufacturer's suggested retail price |
| range from $15.95 to $29.95, clearly produce very | | | | (MSRP) for the factory OEM parts (Original |
| low profits, then why do so many service facilities | | | | Equipment Manufacturer). |
| advertise oil change specials? | | | | - Local Shop Aftermarket Air Filter: $32 |
| The answer is actually very simple: It gets you in the | | | | - Manufacturer OEM Filter, MSRP: $17 |
| door. Service centers know that once they have | | | | - Local Shop Aftermarket Top Hose: $36 |
| your vehicle, they can sell you additional work. | | | | - Manufacturer OEM Top Hose, MSRP: $19 |
| Suggesting additional work is called upselling, and it's a | | | | Notice that this local shop was doubling the price of |
| primary profit tactic of every service facility. Here's a | | | | the OEM parts with its inferior aftermarket parts. |
| typical example. You drop your vehicle off for "just | | | | Now, let's look at the labor time that was quoted. |
| an oil change." Upon completion your service | | | | - Local Shop Labor Time: 2.0 @ $60 per hour = $120 |
| representative smiles and proudly states, "We | | | | - Manufacturer Labor Time: 0.9 @ $60 per hour = $81 |
| noticed that your air filter was dirty; so we popped in | | | | Notice that the shop labor time estimate for the |
| a new one." You may think great; what wonderful | | | | repairs was 2 hours. This is more than twicethe |
| service!" | | | | manufacturer's recommendations (even after |
| What really occurred is that you were casually upsold | | | | calculating manufacturer times against the industry |
| an air filter. It probably wasn't needed; itcertainly | | | | standard multiplier). |
| wasn't replaced according to any factory | | | | Had the local shop abided by the vehicle's particular |
| recommendation, and you were definitely | | | | maintenance intervals instead of trying to make a |
| overcharged for what was most likely a | | | | quick buck, it should have recommended a |
| poorly-fitting, aftermarket, inferior air filter. | | | | 60,000-mile service at the next visit. This would have |
| Here's a real-life example that occurred recently. This | | | | better served the client, saved him $199, and |
| particular vehicle had 54,000 miles on it, and was | | | | maintained the vehicle properly. Instead, they lost a |
| dropped off at a local shop for "just an oil change." | | | | client forever! |
| Upon paying the bill, the customer was handed an | | | | What needs to be made crystal clear is that this |
| estimate for $199 to replace his air filter and top | | | | type of price-gouging occurs every day in every |
| radiator hose. Shocked at the price, he called me. | | | | type of service facility in one form or another across |
| After review, I found that the air filter suggestion | | | | the automotive service industry. |
| was premature. It didn't need replacement until the | | | | This type of price-gouging is considered normal! |