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A Page from the book

                                                      Chapter 3
 
            Knowing how the business works and using this in your favor
 
 
Lets start off with a different real world example of a common automotive repair. Lets say your battery light comes on and you take your vehicle to a service center of your choice. The repair center says you need an alternator. This is believable but we are going to ask lots of questions right from the start and condition the repair center to adjust their thinking when it comes to selling us service repairs. An educated consumer is the repair shops worst nightmare.


You never want to have a repair recommended to you and just say go ahead and do it. If you do this the service advisor will see you as an easy mark. And we are not, we are educated on how the business works and we will prove it to the service sale representative.


So again the service advisor states we need an alternator replaced on the vehicle. The first question we ask is how was this determined. The proper answer to this question is that it was diagnosed on a charging system tester. We can get slick on them and ask what kind of tester did they use.


The industry standard test equipment for the operation is a VAT 40 tester but other equipment can be used. Now at this point the service advisors mind is changing about his next move because he was not expecting these questions. The answer to the question of what kind of tester did they use is not important. Asking the question was the important part.


Next we will ask about the price and ask the sales person to give you a break down of parts and labor. Most people would just ask how much and provide a yes or no answer. But you are not most people and money is important to you.


So the service advisor says the labor is $130.00 and the part is $150.00. Our first question is how did you determine the labor charge. The proper answer is by using a standard labor guide. There are few different brand name labor guides. The most popular labor guides are Chilton’s and Mitchell’s. So if the service advisor says I used Chilton’s this is an acceptable answer.

Next we ask how much the job pays in hours and what is the shop per hour labor charge.

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Lets say the service advisor states that the job pays 2.0 hours and their labor rate is $65.00 an hour making a total labor charge $130.00. Lets respond by saying this price sounds high. Once again we are training the shop that we expect a lot of service for a little amount of money.


At this point we have two choices we can ask to physically see the labor guide or we can move on since we have laid the groundwork for fair pricing. Lets say we want to push the

labor issue. When you are looking at the labor guide you want to verify a few things. The labor guide is laid out very nicely. The headline is your year, make and model of your vehicle.
Labor times vary greatly from year, make and model. You want to verify the service advisor is looking up the labor times on your specific vehicle and not a different vehicle that has higher labor time for replacing the alternator. Next down on the list is the repair operation replace alternator in this case. To the right of the repair operation is the specific labor time assigned to this operation. Below is an example.

 

1997 Chevrolet Blazer                          Labor Hours 


Alternator Replacement                             2.0

Includes diagnosis

Add with 4wd                                             0.2

 
 
 
 
 
 

 

In the above example we do not have four wheel drive so our labor time is 2.0 hours
Now we feel confident that the labor time quoted is reasonable and customary. Now its time to ask about the parts. Using the same repair as an example. The repair shop should give us the option of purchasing a new or remanufactured alternator.
If your vehicle will be with you long term then new is the way to go. If you want to save money or your vehicle is older then remanufactured will be ok. Some shops will recommend what is best for them as far as their profit margins or bonuses from their parts supplier.

If you go with the remanufactured alternator make sure you ask about the parts warranty.  The standard warranty would be 90days but one year and lifetime warranties are offered by some remanufactures. Keep in mind you should also ask if the alternator fails and is covered under warranty is the labor time covered as well. This will be up to the individual repair shop. But again by asking these questions we are controlling the shop instead of them controlling us.
So now we are ready to ask the burning parts questions. How did you arrive at this price for parts you ask the sales person? The right answer is we have a standard parts mark up of 30% or the cost of the part plus 30%.
You then verbally confirm the parts price. So a remanufactured alternator will cost me $145.00 and is guaranteed for 90days parts and labor. Wow that sounds high is your response. At This point the service advisor is thinking twice at recommending things you don’t need because he considers you very price motivated.
Now once again we can move on from here or attempt to verify pricing on the part. Lets be tough and break out the cell phone or use the shops phone to check this alternator

price. Lets call your most common parts store in your area. AutoZone, Pep boys, Western Auto any large chain will do. Ask for a price quote for a remanufactured alternator for your 1997 Chevy blazer.
Make sure you ask about the warranty period so you can compare apples to apples. Now remember to compare price we have to add 30% to what ever AutoZone quoted to us. The shop does have the right to make some money on parts.

If the prices match up or is close we know the shop is being fair.
Now the last question to ask about parts as it relates to alternators, is the old alternator used as a core. A core is when the shop returns the part to the supplier to be remanufactured for resale. Core charges apply to alternators, starters, power steering pumps, compressors, axle shafts, Rack and Pinion steering gears, and anything else that has the word remanufactured in its title. 
At this point the service advisor is blown away that you know what a core charge is and is thinking you are a veteran of this business. We also ask this question because if the old part is returned to the parts house then no disposal of old parts is required and no disposal fees should be charged.

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