How Labor Charges Are Calculated

Automotive repair technicians often use a standard method to calculate labor charges. Whether you're in need of a few car repairs, or you are interested in using this same method at your own shop, read on to find out just exactly how labor charges are calculated.

Step 1

Realize that it's not as simple as figuring out how long a job took to complete. Many unsuspecting vehicle owners assume that a mechanic or automotive shop worker record every specific detail of a vehicle's repair and maintenance journey in order to arrive at a definite time it took to complete that job. Not so. Actually, mechanics don't even look at the clock when they begin working on your car. This is because repair facilities use a standardized table that shows the number of hours it is expected to take in order to complete every different vehicle repair. So regardless if you're getting Joe-The-New-Guy or Pete-The-Efficient-Guy, you will be charged the same number of hours for labor on your car. There are a few different tables that are commonly used by repair facilities in the U.S. but the most common one is the Mitchell table.

Step 2

Understand the Mitchell table. Under the Mitchell Standardized Labor Rates Table, rates are shown for how long, on average, it will take a mechanic to complete any and all repairs on every make and model of vehicle. Mechanics can access an online directory to arrive at this standardized rate, or look at a labor rate chart. For example, you might discover that to replace the brakes on a 2000 Camaro, the flat rate is 2.6 hours. So every shop, regardless of location, staff or business strategy, will use this same number of hours when calculating labor charges.

Step 3

Realize how shops make a profit. The Mitchell table outlines the average amount of time it should take to complete a job, but it certainly doesn't account for all circumstances. If a shop is staffed with experienced, speedy and efficient mechanics, a Camaro brake repair likely won't take as long as 2.6 hours. If the mechanic is able to complete the job sooner, the shop will still charge the same rate to the customer (2.6 hours of labor) but the shop will pocket the extra money. In essence, a mechanic could put in an 18-hour day in 8 hours, provided he works efficiently. Now you can start to see how an auto repair business can really rake in the cash.

This isn't all just bad news for us, the consumers, though. Look at the flip side of this situation. If Joe-The-New-Guy is assigned to change the brakes on the Camaro, and it takes him 4 hours because of his inexperience, it doesn't matter. The shop can still only charge the customer for 2.6 hours of labor, according to the standardized Mitchell table of labor rates.

Step 4

Even with a standardized labor chart, charges will be calculated differently. Consumers love this generic approach to pricing auto repairs. But they're often surprised at the difference in repair bills for the exact same labor at different shops. This is because you also have to take into consideration the labor rate at each specific shop. One shop may charge $85 an hour for labor, while another shop may only charge $55 an hour. For a Camaro's brake job, the price will be significantly different for the same amount of labor, at $221 versus $143, respectively. Obviously, the shop rate makes a huge difference in the overall price for vehicle maintenance and repair, even when the labor charges are calculated the same way (using the Mitchell table).


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