How Much to Charge for Auto Repair
You have been saving money for quite a while, or you have managed to acquire a loan, and now you are a proud owner of an auto repair business. There are so many vehicles today that auto repair shops have become a lucrative opportunity. If you do it right, you will make significant profits in your enterprise. However, the question that must be lingering in your mind is how much you charge your customers? It can be a tough call to decide how much to charge for auto repair, especially when starting. Fortunately, experts have developed a method to help you calculate your labor fees for auto repair.
Common Repairs and the Costs
You will be dealing with different repairs in your auto shop, and they have varying costs depending on the work and any spare parts required. Here are seven of the most common auto repairs and their costs to help you determine how much to charge for auto repair;
Wheel alignment is an essential repair and maintenance task that ensures a vehicle is safe on the road. The average cost of such a repair is about $102, considering the specialty it requires and the equipment used to align the wheels.
All the vehicles on the road require windows. So, you can be sure that window repairs and replacements are services that will be highly sought in your auto shop. The average cost for a window replacement is $125. The amount can be higher depending on the type of vehicle you will be repairing. Window replacement costs can go high, to ranging between $200 and $400.
A vehicle or motorbike cannot function effectively without a clutch. Repairs are ideal in cases where the clutch is not in bad condition. However, if it cannot be repaired, the best thing is to replace it. A car’s clutch is a small part, but when you consider its importance and the load of work to be done, your customers will be willing to pay up to $1000 to have it fixed.
Crankshaft collaborates with the engine to ensure the vehicle moves from point A to B. It turns, consequently making the wheels turn. Depending on the car model, the crankshaft price can range between a few hundred dollars and several thousand dollars. Labor, too, can be expensive, but in most cases, it ranges between $300 and $800.
Vehicles need clean oil to prevent the engine from getting damaged. Oil change is a common maintenance task for many cars and motorcycles. However, it is not a complicated project and the oil, too, is not so expensive. This is why the average oil change cost lies between $27 and $87 in most garages.
Replacing a car’s radiator is a viable option only when it is beyond repair. This is an essential part of a car’s engine. The total replacement costs for this car part can be anywhere between $262 and $1193. However, the average price for such a replacement is $671.
Water Pump Replacement
The water pump in a car is made of iron and aluminum, and its role is to pump water into the engine to cool it down when running. If this pump is not functional, the car’s engine will overheat and eventually get severe damage. When you factor in such importance, you will understand why the average cost for a water pump replacement is $524.
How to Determine Your Charge for Auto Repair
As the business owner, you desire to ensure your customers get the best value for their money. However, to achieve that, you need to set fair prices for your services. Here are some of the best ways you can determine your labor cost without being too hard on your clients;
Have a Different Perspective
How you look at your business will help you determine how much to charge for auto repair, such as windshield repair and other services you offer. Believe in the value of your enterprise and the services you provide to the customers. Professionals who have been in this business for a long time say if you do not charge enough or are afraid to charge more, you are not doing enough to warrant the expenses.
You may have come across some underpriced auto repair shops. The owners of such businesses are contented with meeting their basic needs, such as food and rent. They employ their relatives, college students, and themselves because, with such employees, there will be cheap labor. But, that shows how low they value their services and the business in general.
Stick to Your Best Clients
You may be a first-time owner of an auto repair shop, but you may have created a loyal clientele where you were working before. The fear of scaring away clients by raising your labor rate may be stressing you. However, you need to understand that there are tight-fisted clients out there, and they only make up about 30 to 40% of the customer base in a cheap shop. With time, you will know your best customers who can pay for your services regardless of the charges.
Some frugal clients may even remain behind to support your startup. Such may have to break their budget into two or three visits, but they will always bring their vehicles for window replacement and other repairs because they trust no one else to work on it. That is why it is crucial to create trust-based relationships with your customers to make it easier for you to decide how much to charge for auto repair.
Make the Calculations
There is no formula to calculate your labor costs, but it is advisable to work with a coach. Such an expert will help you determine your service rates, if there is a need to change them, and look at the enterprise as it was and if it is profitable. If any prices are to be increased, you need to work at it through your labor rates and not the prices of the parts. If you want to increase the charges for auto repair, you must ensure that the increases are not meant to cover a low expected loss ratio.
Know the Factors
It is ideal to set specific charges for different tasks. For instance, special vehicle repair rates can be different from those for repairing a ten-year-old car.
Cold Call the Competitors
This is the best technique to find out what the other dealers in the market charge for their services. Nonetheless, you should be smart with your moves because many competitors are getting wiser about cold calling. Experts advise that the best way to do it is by using an outside source. It is essential to check out neighboring garages’ labor rates, but do not make it your primary basis to decide how much you will charge.
Focus on Customer Reaction
Now that you have the right price for the services you will be offering, you must learn how to implement them without crashing with your clients. It would be a relief to know that most customers will not even concentrate on price changes as long as you do an excellent job on their vehicle or motorcycle. That is unlike selling a product, such as wine, because clients will notice any price changes. However, if they notice you charge too high for an auto repair, it is recommendable not to explain why you charge that much.
The only thing you should do is to explain to the client that the charges are like so because of the great job you do and because your auto shop needs to make a profit like any other business. If a client has a problem after explaining that, they are not ideal for your shop. It is also advisable to adjust your charges annually, preferably increasing them by 1 to 3%.
Factors to Consider When Deciding How Much to Charge for Auto Repair
Whichever field you decide to enter in the automotive industry, even if it is an auto body shop, you need to understand that the amount you charge for your services can either make you successful or be the reason for your downfall. From the above-discussed information, you can now comfortably determine how much you will ask for your services. However, you need to understand that you are not alone in this business. That is why it is imperative to make the following considerations to ensure that the charges you set fully satisfy your needs and those of your business;
It is essential to consider what your competitors charge to understand how much to charge for auto repair. There are several techniques you can use to acquire that kind of information. Cold calling is one of them, although many companies today are aware of this method. Moreover, you can get information about your competitors’ prices from their websites, published, or ask friends and family who have procured a service from your competitor.
Try to be unique in your business, and the right clients will automatically come to you. For instance, besides repairing vehicles, you can think of other services, such as truck rentals. You can even brand your business to make it more appealing to potential clients. Think of procuring a garage door service to have your shop’s entrance repaired or replaced. While you are at it, also consider any offers your competitors may be giving to their clients.
Customers’ Value Perception
When offering a service in your shop, such as auto flooring, your client will be willing to pay any amount depending on how they value the service and your expertise. This makes it challenging to decide how much to charge for auto repair. You may price your services too high, but the client does not perceive the services or your expertise as that valuable.That is why professionals will tell you that setting a price for your service is a form of art. Fixing a price for a service is different from setting one for a product, such as dealing with property selling.
Therefore, as you set how much to charge for auto repair, you should have your prospective clients in mind. A buyer-oriented strategy will help you understand that your clients will be exchanging a valuable thing (their money) for another valuable thing (the services you offer).
The Total Costs
Undoubtedly, operating an auto shop is not like running a laundromat or a barbershop. All three businesses offer services, but repairing vehicles can be expensive. When deciding how much to charge for auto repair services, you need to factor in the total cost of the service you will be offering. That includes the price of any necessary spare parts and paying the employees involved in delivering the service. When fixing the charges for auto repairs, the best way is to calculate the total cost of providing specific services and add an extra amount, which will be your profit.
Your Business’ Objectives
People who have been in business before, such as motorcycle dealers, have clearly defined business objectives. You should have yours, too, so that they will guide you when deciding how much to charge for auto repair. When you are starting, your main objective should be to create a broad and stable clientele. As such, you may consider low prices to attract more customers. Those businesses whose objective is profit maximization charge high to increase their return on investment.
If you have decided to venture into the auto repair business, you are on your way to financial freedom. However, the success rate is dependent on many things, and one of the critical ones is, understanding how much to charge for auto repair. The above-discussed information has laid out some of the most common repairs and their costs. Additionally, you have also learned how to determine how much you should charge and the factors to consider when setting such prices. Therefore, follow through it keenly and research more on the subject to ensure your startup is successful.