You’re sitting in your doctor’s office with a sharp pain in your left shoulder. Your mind fills with “what-ifs” and “unknowns.”
After the doctor examines you, he says, “Well, it looks like you have a torn rotator cuff. You’ll need surgery. Before we proceed, we’ll have to perform a few tests to properly pinpoint the tear and confirm the problem. You’ll need an X-ray and an MRI.”
You look at him and reply, “O.K. doc, if I let you do the surgery, how about waiving those diagnostic fees?”
This doesn’t happen at the doctor’s office, but it sure does in our world as auto repairers. Many shops struggle with charging for diagnostic testing, and it’s hurting their bottom line.
Is it fair comparing our profession to a visit to the doctor? I say yes. Although many tests are not done by the doctor, certain tests are routinely ordered, and those tests are always billed to the customer or insurance company. In our industry, many test procedures are performed that fall under the radar, creating countless hours that aren’t billed.
Let’s take a look at two scenarios; a front brake job with rotors and pads, and a check-engine light diagnosis on a Honda Civic. Shops will charge either book time or a menu price to install the pads and rotors. Labor rates vary from shop to shop, but the customer will get billed anywhere from 0.8 of an hour to 1.4 hours. Now combine that with the parts profit on the pads and rotors and the shop ends up with a nice chunk of change. Plus, your effective labor rate on that job well exceeds your posted rate.
Tell me, how long does it take your tech to complete that Honda Civic brake job? Under an hour? And, with rare exception, no service advisor or shop owner ever has an issue charging or selling a brake job. Any tech in your shop can do that brake job; it takes no special tools, no ongoing training, and no constant scanner updates, making jobs like this very profitable.
Now, say that same Civic comes in with a check-engine light. This job will require a well-trained top-level tech, online information, highly specialized scanners, multi-meters and scopes, ongoing scanner updates, road testing and retesting to confirm the repair. I get exhausted just thinking about it.
The question is; how do you charge for the check-engine light? Do you waive the diagnostic fee if the customer authorizes the repair? Do you have a flat menu price, no matter how long it takes? Do you charge by the hour? Or do you somehow bury the diagnostic charges in the labor if the customer authorizes the repair? For those who do bury the diagnostic charges, my question to you is this: If it takes two hours to diagnose an intermittent failing cam sensor, and it takes 10 minutes to replace it, are you really going to charge the customer two hours and 10 minutes to install it? Somehow, I doubt that.
The real question is whether you are charging enough for highly complicated and time-consuming test procedures. If not, you are hurting your bottom line. The reason some shops are not properly charging for diagnostic testing is due to fear of losing the job, not knowing how to charge, or the shop really does not know the true hidden costs of what it takes to diagnose these rocket ships on wheels.
If you are not charging the right amount for diagnostic testing, you will never recoup the money you are spending on training, equipment, updates and informational resources. You will not be able to hire or continue to pay a top-level technician. You had better hope you can fill your bays with brake jobs.
For those shops that are charging, sorry for the rant. You have done the math and know that the cost of diagnostic testing is not just the 30 minutes or the hour your tech is on the job, but all of the associated costs that must be factored into the bill. If you feel you’re not charging enough for diagnostic work, get the sales training needed to properly sell diagnostic testing and do the math—think about the time it takes and the investment you made to properly diagnose the modern car.
One last thing. Please don’t tell me, “It only took my tech 15 minutes to diagnose the problem.” There’s an old saying about a person who asked Picasso to paint a portrait, which he did. When he was finished, Picasso requested $10,000. The customer argued that it only took 15 minutes to paint. Picasso responded, “You are mistaken, it has taken me a lifetime.”
Joe Marconi has more than three decades of experience in the automotive repair industry. He is the owner of Osceola Garage in Baldwin Place, N.Y., a business development coach for Elite Worldwide and co-founder of autoshopowner.com. Reach him at [email protected].
