Dear Tom and Ray:
I discovered recently that the parts used by my local repair shop are marked
up by 33 percent. I take this to mean that if I went to the dealer and bought
the same part, it would have been a lot cheaper. My garage says this is a
standard practice. Are they giving me a song and dance? -- John
Tom: Yes, they are, John. Most repair shops don't mark up parts by
33 percent. Most mark them up by between 50 percent and 100 percent.
Ray: But your assumption about the dealer price is wrong. The
dealer sells parts to your garage at a special discount -- a discount the garage
won't give you. So when your garage marks a part up by 33 percent, that probably
brings it back up to the retail price, or thereabouts.
Tom: In other words, if YOU went to the dealership's parts window
and bought the part (or if you had the car serviced at the dealership), you
would be charged the "list price," or about what your local garage charged you.
Ray: Right. Some garages might make exorbitant markups, because
there are unscrupulous people in every business. I mean, look at my brother.
Tom: If you're curious, take your repair slip, pick a part and
call your local dealership. Ask the mechanic how much the part would cost you if
you walked in off the street. My guess is that it'll be close to what your
garage is charging.
Ray: And there's nothing underhanded about the practice of marking
up the cost of your individual components, John. It's how business works. You
charge for a combination of your expertise and the parts you know are required.
Your plumber, electrician and local pizza shop do exactly the same thing.
© 2001 by Tom and Ray Magliozzi and Doug Berman
Distributed by King Features Syndicate, Inc.